Australia’s Beach Energy and Japan’s Itochu plan A$1-bn LNG plant

Australian oil and gas company Beach Energy Ltd and one of Japan's leading trading houses Itochu Corp yesterday agreed to a deal to jointly search potential sites for the construction of a mid-scale liquefied natural gas (LNG) facility in South Australia with an investment of approximately A$1 billion ($982 million).

The companies signed a memorandum of understanding (MOU) relating to the proposed LNG plant, the first one to be built in South Australia, which would be supplied from Beach's extensive gas portfolio comprising both conventional and unconventional gas sources.

Beach managing director Reg Nelson said, ''South Australia appears to be an excellent choice for a future LNG facility, and such a project would generate significant employment for the state.''

Nelson said that the project would generate employment in thousands during the development stage and in hundreds during its operational phase.

The new LNG plant and offloading terminal would have a capacity of 1 million tonnes per annum and would require approximately 60 petajoules (the equivalent of  British Thermal Units or BTU) of gas per annum. The companies plan to export LNG from the new facility to far-east markets including Japan.

''Importantly an opportunity such as this will further accelerate the next phase of the Cooper Basin as one of Australia's major sources of long-term gas supply," Nelson said.