Queensland Gas awards Australia LNG job to Bechtel

PERTH, July 15 (Reuters) - Australian coal-seam gas producer Queensland Gas Co Ltd QGC.AX (QGC) has awarded U.S.-based engineer Bechtel Corp as project contractor for its liquefied natural gas (LNG) project in Australia, QGC said on Tuesday.

Under the deal, Bechtel will begin front-end engineering design of the plant immediately, QGC said. A final investment decision on the project is is scheduled for early 2010.

The proposed $8 billion plant, in which British gas producer BG Group (BG.L) has a stake, will have initial production capacity of 3-4 million tonnes a year for export markets, QGC said. It will be built in Gladstone, in Queensland state.

QGC said the Queensland Curtis LNG project could deliver up to 12 million tonnes a year, depending on additional gas reserves. It is one of four LNG projects in Queensland using coal seam gas as feedstock, and would be one of the first worldwide.

QGC shares were up 3.56 percent at A$4.94 by 0053 GMT, in an overall weaker market.

QGC said that as part of the engineering work, Bechtel would refine its development of the ConocoPhillips Optimized Cascade process, whereby gas is cooled and ultimately liquefied through three cycles of refrigeration.

Bechtel is one of the world's largest LNG contractors and has built about a third of all LNG production capacity worldwide.

(Reporting by Fayen Wong, Editing by Mark Bendeich)