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$23bn LNG project set to expand in Qld


A massive $23 billion gas project in Queensland is to be expanded, creating an extra 2,000 jobs in rural areas.

The owners of the Australia Pacific liquefied natural gas (APLNG) project on Wednesday announced they had committed to developing a second stage.

The project was set up by joint venture partners Origin Energy, US giant ConocoPhillips and China's Sinopec to develop one of Australia's biggest coal seam gas (CSG) resources in the Surat and Bowen basins.

The partners will build a major transmission pipeline to deliver CSG to processing plants on Curtis Island off the coast of Gladstone, from where the CSG will be frozen and converted to LNG for export.

A decision to build the first compressor plant was made in mid-2011 but the joint venture partners delayed a commitment to a second.

They have now approved a final investment decision for the second plant after sealing a 20-year supply contract with Japanese power company Kansai.

LNG exports from the first plant are due to begin in 2015, with the second plant coming onstream a year later.

Another 2,000 workers will need to be hired to build the second plant, adding to the 4,000-strong workforce already in place.

About 1,000 workers will run the plants once they are complete, with each facility having a production capacity of 4.5 million tonnes per annum.

"It will be a very, very substantial employer," Origin managing director and APLNG chairman Grant King told reporters.

The APLNG project has permission to build up to four plants at Curtis Island.

But Mr King said there were no current plans to build more than two.

Meanwhile, Sinopec has forked out $US1.4 billion ($A1.37 billion) to increase its stake in APLNG to 25 per cent from 15 per cent.

As a result, Origin's shareholding in the joint venture will fall from 42.5 per cent to 37.5 per cent.

Origin and ConocoPhillips, which also holds a 37.5 per cent stake in APLNG, both plan to reduce their holdings even further.

Mr King said he envisaged Origin would end up with about 30 per cent ownership in the long term.

Treasurer Wayne Swan said APLNG's decision to expand showed that the government's controversial carbon price would not wipe the city of Gladstone off the map.

It proved the economic prospects of the nation were strong, despite what Opposition Leader Tony Abbott claimed, he said.

"While Tony Abbott's running around telling everybody the sky's going to fall in, and Gladstone's going to be wiped off the map, this investment underscores the absurdity of the doomsday predictions from the Liberal Party," he said.

Origin's shares were 58 cents, or 4.7 per cent, higher at $12.91 at 1424 AEST.