PERTH (miningweekly.com) – The developers of two of Australia’s largest liquefied natural gas (LNG) projects have signed gas swap and infrastructure connection agreements, allowing the parties to realise capital and operational efficiencies.

The new agreements executed between the Gladstone LNG (GLNG) project and the Australia Pacific LNG (APLNG) project, would make gas transportation more efficient between the two projects’ Surat basin gas fields, in Queensland, and would reduce the need for additional pipeline infrastructure.

The $18.50-billion GLNG project, being developed by Australian major Santos and its joint venture (JV) partners Petronas, Total and Kogas, is slated for first production in 2015 and will deliver about 7.8-million tonnes a year of gas.

The nine-million-tonne-a-year APLNG project is being developed by Origin Energy and its JV partners ConocoPhillips and Sinopec and will start production by mid-2015. The project currently has a price tag of $24.7-billion.

Santos VP Trevor Brown pointed out on Friday that the two projects were already JV partners in a number of permits in the Surat and Bowen basins, and added that the agreements would allow both parties to more efficiently access and transport their equity gas, in order to meet the requirements of the coal-seam-gas to LNG projects.

“This agreement demonstrates the real efforts that Queensland’s LNG projects are making to work together to reduce costs and deliver long-lasting efficiencies.

“It’s a win-win for both projects and puts us in a strong position as we work towards the delivery of first LNG in 2015.”

Origin’s CEO for LNG, David Baldwin, noted that the agreement also reduced the footprint of the LNG industry by avoiding the need to build additional infrastructure such as pipelines.

Under the terms of the agreement, two pipeline connection points would be built between the GLNG and the APLNG infrastructure and a number of gas swap agreements undertaken to minimise gas movement and operational costs.

The first pipeline connection, located on the Santos-operated Fairview gas field, would enable significant volumes of gas to flow bi-directionally between GLNG and the APLGN project.

The second pipeline will connect the GLNG Scotia gas field to APLNG’s main gas transmission pipeline.

Without the agreement, both projects would require a total of 140 km of additional pipelines and multiple connection points at compressor stations to deliver their respective gas loads to Curtis Island.