BOC and QGC announced a long-term gas supply agreement worth more than 100 million dollar that puts them on track to extend a new transport fuel industry to Queensland and completes an interstate network of liquefied natural gas (LNG) refuelling stations for the trucking industry. BOC, a member of The Linde Group, and QGC, a BG Group business, announced the contract at a function in Chinchilla, southern Queensland, attended by the Premier of Queensland, the Honourable Anna Bligh MP. As part of the agreement, QGC will supply BOC with up to 30 petajoules of coal seam gas over 15 years.
QGC will supply gas to BOC from July 2011, putting the companies on track to become the first in Australia to produce LNG from coal seam gas, through safe and proven liquefaction technology. To process the gas into LNG, BOC will build a market-leading micro-LNG plant similar to the one that BOC is now constructing in Westbury, Tasmania. The plant, planned to be built near QGC’s gas fields in the Surat Basin, will produce 50 tonnes of LNG a day equivalent to 70,000 litres of diesel for heavy transport and industry.
LNG is methane, a natural gas, which when cooled to about -1620 degrees becomes liquefied, taking up 600 times less volume than as a gas. It can then easily be stored in tanks at low pressure and be used as a fuel for heavy transport. Natural gas is one of the fuels that can be safely transported. It provides a range of critical environmental advantages when compared to competing hydrocarbon fuels, including significantly lower carbon dioxide and other greenhouse gas emissions and cleaner air quality.
BOC plans to complete an interstate network of liquefied natural gas refuelling stations for the trucking industry, building and operating up to eight refuelling stations from Queensland to Victoria. As a starting point in Queensland, BOC proposes to build a refuelling station on the Warrego Highway, subject to further discussions with its customers. These stations will be supplied from BOC’s existing liquefaction plant in Victoria and the one to be built in the Surat Basin. The Victorian plant and another under construction in Tasmania are based on the use of conventional gas.
The company is seeking to begin construction of the new plant next to QGC’s Condamine Power Station, near Miles, subject to a formal development approval process, early next year. QGC plans to assist in the supply of land and utilities. BOC expects to spend at least $100 million exclusive of gas on construction and operation during the lifetime of the project. Up to 40 people will be employed during the construction phase and two full-time employees will be based at the plant on completion.