NEWS ARCHIVE

Gorgon contractor optimistic on LNG fuel

A MAJOR contractor on the Chevron-led Gorgon LNG project in Western Australia has identified a dy...

Gorgon contractor optimistic on LNG fuel

Michael Carreau - director of energy at Canadian employee-owned infrastructure services firm Hatch, which at its peak had 800 people working on Gorgon - said that while the investment landscape has been tough, change is afoot.

The cost of liquefying natural gas and its transportation to the end user is expensive, he said, while converting to natural gas is not easy and was also expensive - yet his company needs enough clients ready to sign long term natural gas purchase agreement.

"You need committed clients to justify investment of $C100 million ($A105 million), $200 million or $400 million to develop the infrastructure to deliver LNG to various points," Carreau said.

"This is a chicken and an egg situation. But this is changing.

"Gaz Metro here in Quebec has just announced a $120 million project, financed in part by the government to develop a plant to provide natural gas for transportation vehicles, ships and small mines."

While in the past Hatch had problems supplying clients who wanted to move to natural gas, Carreau said the economic situation was improving due to the sharp decrease in natural gas price and the availability of proven technology for miners to operate equipment run on natural gas by 2017.

"What was an obstacle in the past is going to be an enabler in the future," he said.

He noted that eastern Canada had two projects aimed at exporting natural gas to foreign markets comprising Canaport - an LNG import terminal which received regulatory approval to export last year and Goldboro - currently at feasibility stage.

"At Canaport, they keep their option open to re-export the received LNG to cash in on seasonal variations in prices instead of continuously selling the natural gas through their pipeline interconnected to the US," Carreau said.

"They have huge levels of storage and the plant is underutilised at the moment.

"Another part of the business on the east coast is to use natural gas for remote locations. About 1 billion litres of diesel is used each year by either remote communities or by mining in the north of Quebec and no pipeline gets that far north.

"An important activity in the east at the moment is the development of an LNG project to liquefy natural gas and ship it by boat to the north to provide ways to replace the diesel with natural gas."

TOPICS:

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

editions

ENB CCS Report 2024

ENB’s CCS Report 2024 finds that CCS could be the much-needed magic bullet for Australia’s decarbonisation drive

editions

ENB Cost Report 2023

ENB’s latest Cost Report findings provide optimism as investments in oil and gas, as well as new energy rise.

editions

ENB Future of Energy Report 2023

ENB’s inaugural Future of Energy Report details the industry outlook on the medium-to-long-term future for the sector in the Asia Pacific region.

editions

ENB Cost Report 2021

This industry-wide report aims to understand current cost levels across the energy industry