(EnergyAsia, May 30 2011, Monday) — Australia’s Prime Minister Julia Gillard has officially launched construction works on the massive A$16-billion Santos Gladstone liquefied natural gas plant (LNG) on Curtis Island in Queensland state. (US$1=A$0.98).

Witnessing the start of a new economic boom for the region at last Friday’s ceremony were the Queensland Premier Anna Bligh and senior representatives of the project partners, Australian upstream firm Santos, Malaysian state oil and gas firm Petronas, Korea Gas (Kogas), and Fance’s Total.

When completed, GLNG will supply 11% of South Korea’s domestic gas needs and nine percent of Malaysian demand, said project operator Santos.

The start of construction culminated more than three years of planning and preparation with work now focused on the mainland sites in the Port of Gladstone as well as temporary and permanent logistics facilities.

Santos and its partners have moved quickly to advance the GLNG project since making a final investment decision in January this year. Contracts worth more than A$700 million have been let to Australian suppliers in past three months.

Plant contractor Bechtel of the US has already issued contracts worth over A$500 million, while gas transmission pipeline contractor Saipem of Italy has started mobilisation and preliminary survey work, and upstream surface facilities contractor Fluor of the US has begun detailed engineering work.

Premier Bligh said the GLNG project had already added over A$2 billion to Queensland’s economy and is set to make a substantially greater contribution.

“Over the next 25 years, the project will contribute over A$6 billion to state revenue, generate A$9 billion a year in exports and see the creation of 6,000 jobs,” she said.

Santos CEO and managing director David Knox said:

“Construction on Curtis Island heralds an economic boost for Gladstone, Queensland and Australia – and represents another significant commercial and strategic link between Australia and Asia. Over the life of the project, GLNG will pay around A$40 billion in Federal Income Tax.

“Curtis Island is the engine room for the whole project. This is where coal seam gas from Queensland’s world-class fields will be converted to LNG and exported to Asia. The growing demand for natural gas in Asia is driven by the region’s need for cleaner, secure, safe and reliable energy – and that’s what GLNG will provide.”

GLNG CEO Mark Macfarlane said: “Throughout construction, GLNG will always be considerate of the community’s needs. This project will leave a positive and lasting legacy.”

Representing the project’s partners were Petronas Executive Vice President (Gas and Power) Anuar Ahmad, KOGAS Executive Vice President Resources Development, Young Sung Park, and Mike Sangster, managing director of Total Australia.

GLNG is a joint venture between Santos (30%) and three of the world’s largest LNG companies, Petronas (27.5%), Total (27.5%) and KOGAS (15%).

GLNG includes the development of coal seam gas (CSG) resources in the Bowen and Surat Basins in south-east Queensland, construction of a 420-kilometre gas transmission pipeline from the gas fields to Gladstone, and two LNG trains with a combined nameplate capacity of 7.8 million tonnes per year on Curtis Island.

The plant is expected to begin LNG exports in 2015, with binding sales agreements with Petronas and Kogas for a total of seven million tones per year.