(MENAFN - ProactiveInvestors - Australia) Liquefied Natural Gas Limited (ASX: LNG) has confirmed that the total capital cost for its proposed Fisherman's Landing LNG project at Gladstone, Queensland, remains at US1.1 billion (A1.04 billion).
This covers the engineering, procurement and construction for the first 1.9 million tonne per annum (MMtpa) LNG train as well as a 22 kilometre connecting gas pipeline, gas treatment and liquefaction plant, 200,000 square metre LNG tank, jetty and ship loading facility and supporting infrastructure.
It also includes the company's share of dredging and dredge material disposal costs under contract with Gladstone Ports Corporation Limited, plus other project costs such as owner's costs, project management, insurance and site lease payments during the construction period.
The confirmation of its cost estimates comes after 12 months of work by LNG Limited and its EPC contractor, China Huanqiu Contracting & Engineering Corporation (HQC).
Both companies are now in the final stages of comprehensively reviewing and fully validating all costs and agreeing key EPC contract commercial terms, including plant performance guarantees, to enable the fine tuning and formal agreement of the EPC contract fixed price lump sum amount.
HQC, LNG Limited's largest shareholder (19.9%) and a wholly owned subsidiary of China National Petroleum Corporation, has built the majority of China's LNG terminals and recently completed the EPC scope of work and commissioning of the 500,000 tonne per annum Ansai liquefaction plant in China.
Adding a second train of equal size will add about US500 million to the capital cost which, together with additional dredging costs, will bring total costs for a 3.8MMtpa project to US1.7 billion.
This represents a cost of US450 per tonne per annum of LNG production capacity, less than half the cost being reported for the major Australian LNG projects.
LNG Limited has been in talks to secure gas as feedstock for Fisherman's Landing on top of PetroChina's acquisition of Molopo Energy's Queensland coal seam gas assets.
PetroChina and LNG had earlier executed a Letter of Intent under which both were to negotiate a gas supply agreement to feed an initial LNG train.