February 22, 2011 / 3:08 AM / 9 years ago

UPDATE 1-Australia gives Origin environmental approval for LNG project

* Conditions attached to environmental approval

* Joint-venture now able to make final investment decision (Adds Origin comment, details, quotes)

CANBERRA/PERTH, Feb 22 (Reuters) - Australia’s government gave the environmental go-ahead for ConocoPhillips’ and Origin Energy’s $35 billion coal seam-gas project in eastern Queensland state, clearing the way for a final investment decision on the project.

The government had delayed the decision from December, saying it needed more time due to the project’s scale and complexity, and pushing the joint-venture’s final investment decision into 2011.

“I have concluded that the Australia Pacific LNG project can go ahead without unacceptable impacts on matters protected under national environment law,” Environment Minister Tony Burke said on Tuesday.

Burke said he had attached strict environmental conditions to the project requiring approval for water management and how impacts on aquifers, ground and surface water would be minimised.

APLNG, a 50-50 joint venture between Origin and Conoco, will have initial capacity of 4.5 million tonnes per annum (mtpa) of LNG, eventually ramping up to 18 mtpa and was originally scheduled to come online at the end of 2014.

Australia’s booming coal-seam gas industry, centred around Queensland, plans to build up to roughly $70 billion worth of liquefied natural gas (LNG) projects over the next four to seven years around the coal port of Gladstone.

Santos and BG Group have both moved forward with LNG export projects in the region that are expected come online in 2014 and produce more than 15 million tonnes per annum of LNG combined.

Royal Dutch Shell and PetroChina have also planned an LNG export project which is expected to come online sometime between 2015 and 2017.

The boom in coal-seam gas projects has raised some environmental concerns from local communities near the projects in rural areas of northern Queensland state.

“Australia Pacific LNG will pursue high environmental, community consultation and development standards not only during the construction period but also throughout the ongoing operational life of this exciting project,” Origin said in a statement.

Coal-seam gas, also known as coal-bed methane, is extracted by blasting the surrounding rock with high-pressure streams of water, sand, and chemicals.

The process has raised concerns that the projects could pollute a huge underground reservoir, the Great Artesian Basin, which is vital for local agricultural use.

Late last year, traces of a carcinogenic toxin were found in some of APLNG’s exploratory wells this year.

Origin has said that an investigation found there was no significant risk to the environment or human health from the toxin, which was found in tiny amounts. (Reporting by Roy Taylor in CANBERRA and Rebekah Kebede in PERTH; Editing by Balazs Koranyi)

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