Marubeni and Eastern Star Gas Company Agree to Conduct Feasibility Study on Electric-Motor-Driven Mid-Scale LNG Plant

Oct. 15. 2010
Marubeni Corporation

Marubeni and Eastern Star Gas Company (ESG), an Australian gas and coal seam gas (CSG)*1 development company, have signed a Memorandum of Understanding (MOU)  about the proposed electric-motor-driven Mid-Scale LNG plant in Newcastle in the state of New South Wales, Australia.

ESG owns the largest CSG block in New South Wales, and plans to construct an LNG plant in Newcastle, to export LNG from 2014 onward with an initial production capacity of 1 million tons per annum and eventually increasing the capacity to 4 million tons per annum.

ESG agrees to conduct feasibility study with Marubeni, including the study of Marubeni’s future equity participation in the development of the CSG block and the LNG project. Also, as for the pipeline project which connects the CSG block in New South Wales to Newcastle, ESG and Marubeni will conduct feasibility study together with APA group which is the Australia's largest natural gas infrastructure company.

In May 2010, ESG  agreed to conduct the feasibility study for the electric-motor-driven Mid-Scale LNG plant jointly with Hitachi, which has strengths in electric-motor-driven technology, and TOYO which has strengths in project management and system integration. Compared to large base-load plants, this type of plant progressively scalable, and the project period to completion of construction can be shortened. Coupled with fact that construction is expected to cost less this kind of LNG plant is suitable for development of small-to medium-sized gas fields. Marubeni and ESG will study about the economic feasibility, cooperating with Hitachi and TOYO.

Marubeni would like to contribute to stable procurement of LNG by pursuing to establish firm LNG value chain, participating in new kinds of projects which include development of small-to medium-sized gas fields and new types of gas such as CSG.

*1 Coal seam gas is generally referred to as coalbed methane (CBM) and is extracted from coal seams. Because of the rising gas prices and advanced technology in 1990s, the development of unconventional gas is dramatically improved.