Australia Pacific LNG ships first cargo from new terminal after delay

The Australia Pacific LNG project has shipped its first cargo from its new northern Australia facility, the project's co-owner said on Monday, following a delay of at least two weeks with another carrier waiting to be loaded.

Liquefied Natural Gas carrier The Methane Spirit left Curtis Island off Gladstone in Queensland State on Saturday in what is a milestone for the 25 billion Australian dollar (17.42 billion U.S. dollar) project as two other coal seam gas to LNG plants have come online over the past year.

"These are incredibly large, complex projects and exporting the first cargo is a tremendous achievement," Origin Energy managing directory Grant King said in a statement on Monday.

The 9 million tonne-per-year plant is operated by the project's co-owner ConocoPhillips, converting coal seam gas from Queensland state's Surat and Bowen basins 530 kilometres away, where it's converted to LNG for export to Asian customers.

The first shipment comes at a time when the spot price of LNG, closely linked to that of oil, continues to deteriorate as new projects in the Asia-Pacific come online, including ExxonMobil's and Australia's Oil Search Papua New Guinean LNG interests.

Australia is expected to rival Qatar and become the world's largest LNG producer and exporter by 2018 as new coal seam gas and offshore projects come online.

Origin Energy however said most of Australia Pacific's output has been locked into take-or-pay contracts to China's Sinopec and Japan's Kansai.

The two-week delay in first shipment has come at significant cost to Sinopec which has had a ship waiting off Gladstone since Dec. 18 to carry the company's first cargo. Enditem