* Origin to decide on train 2 LNG project by Q1 2012
* Continues sales and equity discussions for train 2
By Rebekah Kebede
PERTH, Nov 17 Origin Energy said
on Thursday it had signed a binding heads of agreement to supply
Japan's Kansai Electric Power with liquefied natural
gas (LNG) from its Australia Pacific LNG project in eastern
The contract will pave the way for Origin to make a final
investment decision on a second train for the project, but the
company is still in talks to secure the rest of the buyers it
needs to go ahead with the project early next year.
"It is a significant step, but doesn't take us to full
capacity in any way. Provided that we make the second train
commitment by first quarter next year, we will maintain the time
table of first gas in 2016," Karen Moses, Origin's executive
director of finance & strategy told reporters.
Under the agreement, Kansai will buy 1 million tonnes of LNG
for 20 years, beginning 2016.
Australia Pacific LNG is a joint venture between
ConocoPhillips and Origin and work on a first LNG train
is already under way after being approved in July.
The deal with Kansai did not include any equity in the
project, but Moses said Kansai may still be a candidate for
buying equity in the project.
"We continue to have conversations with many parties around
equity," Moses said.
Controversy in Australia around coal seam gas, which will be
used to feed the Australia Pacific LNG plant, has not delayed
discussions with customers interested in buying gas from the
project, Moses said.
"It has not caused any change in the progress with any of
the customers," she said.
Coal seam gas has been a focus of criticism with farmers
groups and environmentalists saying it could endanger water
quality in one of Australia's most productive agricultural