Queensland

Nickel refining

See notes on nickel and cobalt.

Ammonia

Gas

State gas usage is about 45 petajoules per year with the bulk for industrial use. Demand however is anticipated to treble to 130 petajoules by year 2000.

In the north of Queensland, about 13 petajoules is used at Gladstone (principally for Queensland Alumina Limited) and in the south about 14 petajoules is used near Brisbane (principally for Astral Pacific [Incitec] for the manufacture of nitrogen fertiliser).

PNG GAS

Exxon has joined (April '99) a consortium with Chevron to bring gas from Papua New Guinea by a 1200 km pipeline to Townsville Queensland. It it will require a baseload helped by an alumina refinery to be operated by Comalco at Gladstone initially requiring 27 petajoules p.a. growing to 80 petajoules by stage 3. A joint venture between Stanwell Corp Ltd and Destec Energy Inc has been selected as preferred bidder for a 750 megawatt power station at Pinnacles, near Townsville.

The proposed pipeline (to be constructed by Australian Gas Light and Petronas of Malaysia) was originally planned to move the natural gas from Chevron's Kutuba onshore field in the Southern Highlands, but Exxon and Oil Search have since agreed to sell their gas in the closer Hides gas field (an entrepreneurial coup for Chevron!). The gas will be transported from Papua New Guinea across Torres Strait and down Cape York Peninsula to Townsville and on to the industrial city of Gladstone. LPG will be stripped in PNG for sale in PNG and Australia. In February 1999, Santos announced it was taking a 25 per cent interest in Hides which has an estimated 5 trillion cubic feet of gas that could become a LNG export centre.

The project is anticipated to cost US$3.5 billion

Potential customers for the PNG gas include aluminum group Comalco Ltd (27pj), nickel producer QNI Ltd (25pj), Orica subsidiary Incitec Ltd , powerstation (40pj) and Australian Magnesium Corp, a joint venture of Queensland Metals Corp NL and Normandy Mining Ltd.Comalco is important to the project and could be crowded out by expansions in alumina production in Western Australia and competition from Malaysia. The Federal government (Invest Australia and now Austrade) had offered $100m of incentives and the Queensland government $250 million (to represent a 25 per cent capital cost subsidy). Comalco has indicated Sarawak as an alternative location. See also alumina.

The pipeline would have a minimum capacity of 300 million cubic feet a day (330 terajoules/day), with the proponents optimistic that capacity could grow over time to about 600 million cubic feet (660 terajoules/day). The pipeline needs a minimum baseload of 120 petajoules to be viable. Some 12 trillion cubic feet of gas is currently available in PNG (about one-half required to sustain the project for 30 years.

Some have identified a political risk of bringing gas between countries. In Jan 2000, landholders halted production of oil in the Moran oilfield which forms part of the Hides, Kutubu, Gobe and Moran field that were aggregated to produce for 30 years. Also seen as a measure of foreign aid to PNG.  

In July 1999, the pipeline sponsors signed binding sales contracts; Allgas, a subsidiary of Queensland government-owned Energex, has contracted to buy 130 petajoules of gas over 20 years, of which 20 petajoules reflect an allocation to Comalco’s proposed Gladstone alumina project.

In May 2001, Woodside Energy and Shell Australia announced agreement to supply the Townsville Nickel Refinery 12.5 petajoules (19 petajoules subject to the Ravensthorpe nickel project over 20 years. The gas would be supplied from Greater Sunrise in the Timor sea and hence reduce the baseload for the PNG gas venture. PNG gas project is believed now to be targeted for 2005. 

July 2001, concerns about political unrest in PNG identified as weakening the prospects.

Coal seam gas

Like its southern neighbour, New South Wales, Queensland has massive coal seam methane reserves in the Bowen Basin with more than 13 000 petajoules (out of 150 000 petajoules) of methane described as potentially recoverable. Transfield Pty Ltd said that it could deliver the 27 pj/year of energy that Comalco's potential $1 billion alumina refinery at Gladstone Qld would need for 20 years, from coal bed methane sources in central Queensland; Comalco is assessing the bid even though it thinks that gas from PNG would be more viable.(April '99)

In February 1999, Queensland Fertilizer Assets Limited announced a feasibility study for an ammonia plant at Pickanjinnie, some 34 km east of Roma based on coal bed methane supplied by Transfield/TriStar pipeline. The evaluation is for 1000 tonne per day of ammonia, 400 tonne per day of nitric acid, 1000 tonne per day of granular urea and 500 tonne per day of low density ammonium nitrate. To cost A$575m, it could be in production by year 2001 based on commencement of construction by July 1999.

Shale deposits

The state has extensive deposits of shale oil (in the 40 million year old deposits) which is a form of fossilised algae called kerogen that under pressure and elevated temperatures has formed into hydrocarbons.  The oil shale has to be heated to release the hydrocarbons as a vapour which when cooled becomes liquid oil and gas (hence similar to natural oil deposits). The shale would be open cut mined and refilled after extraction. Shale can be treated in a Alberta Taciuk Processor which is a large rotating kiln which heats the shale to 500°C. 

The "Rundle Twins" comprising Southern Pacific Petroleum and sister company, Central Pacific Minerals, have a pilot project exploiting the Stuart Shale Oil deposit containing potentially 24 billion barrels of oil in Queensland (82 billion around Australia). It is located at Gladstone on the Stuart oil deposits. Stage 1 has produced 100 000 bbls of oil (refined in Singapore) by July 2001. Stage 2 construction is planned for mid 2003 with full production by end 2005. 

The company has received an excise exemption valued at A$36million for $A54.68 per barrel of product to a maximum of 600 000 barrels over one year. This is in addition to A$20 million received from state and federal government assistance. In July 2002, it was reported it was seeking A$127 million in assistance from the federal government.

Some assessments suggest it could produce 1 million barrels of oil per day with a cumulative production value of A$1 trillion.

The company has experienced difficulty (a "marketing problem") in selling its naphtha and oil products on the Australian market in large part due to the adverse publicity promoted by Greenpeace. Greenpeace has targeted buyers (eg. Caltex) as being irresponsible in claiming to be environmentally responsible and in response (Australian 17 May 2002, page 30) Caltex declared it has only made one purchase and with no plans to buy more (there is also only a limited price advantage).  Accordingly sales have been exported and warehoused (185 000 bbls worth $14m).

In July 2002, it was announced that Mobil Oil Australia was the first long term customer to buy naphtha with a contract of 2 million barrels through to 2005. Low sulfur naphtha reached a production of 50 000 bbls per month in early 2003.

Corporate website of SPP

Greenpeace has expressed concern about the project as it has the potential to add 9 million tonnes of carbon dioxide to Australia's annual emissions. 

Also plans in Western Australia for Syntroleum gas to oil project.  

Trade profile for chemicals (ex TradeData)

Click on name of State or region for details. Under development.

Regions of Queensland on map
Brisbane Gladstone Mt Isa

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