Gladstone, Curtis Island LNG projects ink pipeline

Bilateral agreement will allow projects to buy, sell, swap gas.

Companies behind two major liquefied natural gas (LNG) projects in Queensland have reached a bilateral agreement to jointly invest in secondary pipelines to allow gas to flow between the two projects.

The deal is between the developers of the $US18.5 billion Gladstone LNG project on Curtis Island and the $US15 billion Queensland Curtis LNG project.

It involves Santos, Petronas, Total and Kogas, who are behind the Gladstone LNG project, and BG Group and QGC, the firms behind the Queensland Curtis LNG project (see Tim Treadgold's Santos fires up on LNG).

The pipeline deal will also allow the two projects to be able to buy, sell and swap gas between themselves.

“We expect that this will be just one of the many mutually beneficial arrangements across the industry in the future,” Santos said in a statement announcing the agreement.

The firms have not put a price tag on expected cost savings from the project.

The Queensland Curtis project is expected to begin making LNG exports from 2014, while the Gladstone LNG project is scheduled to begin shipments in 2015.

The agreement covers the construction of two interconnecting pipelines running 50 kilometres each, one on the western side of the Narrows Crossing in central Queensland and the other on Curtis Island.