Australian LNG Limited, which has developed coal seam gas to liquefied natural gas project in Australia Fisherman's Landing LNG Project, showed strong confidence in realization of the project with support of China National Petroleum Corporation on August 23rd 2012.

FL LNG Project has been supported by Huanqiu Contracting and Engineering Corporation, an engineering arm of CNPC, as the biggest shareholder. On August 1st 2012, PetroChina International Investment (Australia) Pty Limited, wholly owned by PetroChina, which is also a group company of CNPC, revealed its plan to acquire Australian Molopo Energy Limited's Queensland coal seam gas asset. On August 2nd 2012, PetroChina Australia agreed with LNG Limited to deliver the coal seam gas to FL LNG.

LNG Limited plans to produce 3 million tonnes per annum of LNG at FL LNG by two trains with each having production capacity of 1.5 million tonnes per annum. First of all, it aims to procure 130 terajoules of feedstock gas per day to cover production by one train in order to make final investment decision for the first train. Besides PetroChina Australia, Australian Metagasco Limited and Australian WestSide Corporation Limited are named as potential suppliers.

PetroChina Australia has a intention to purchase Molop Energy's Bowen Basin coal seam gas assets and deliver those to FL LNG where the gas will be liquefied as LNG. After that, the LNG is to be taken and exported to China by the company. It is estimated that daily 65 terajoules of feedstock gas can be produced at Molopo Energy's gas field. Accordingly, LNG Ltd has had a prospect for its procurement of feedstock gas enough to cover half the quantity of LNG production capacity of one train.

On the other hand, PetroChina and Shell jointly acquired Australian Arrow Energy Ltd. and have proceeded with an another CSG to LNG project using coal seam gas assets of Arrow Energy.

Incidentally, Arrow Energy was a project partner of LNG Limited. In other word, PetroChina is the one which is responsible for forcing FL LNG to be temporarily under suspension after taking over LNG Limited's business partner, which possesses coal seam gas assets.

However, the situation has changed since HQCEC became the largest shareholder of LNG Limited. HQCEC has wholly supported LNG Ltd not only in the engineering aspect but also in negotiations for feedstock gas.

Meanwhile, PetroChina has moved FL LNG forward to the realization significantly by carrying gas from other gas supply sources although it cannot supply gas from Arrow's gas field due to difference in the development schedule.

On top of that, LNG Limited expanded its negotiations for possible procurement sources. It is planning to purchase feedstock gas from Metagasco and take over WestSide. LNG Limited already entered into Memorandum of Understanding for the purchase of daily 90 terajoules of gas and has kept on negotiating to acquire WestSide. If either of negotiations should be settled, it can procure feedstock gas with supply from PetroChina Australia enough to cover production capacity of 1.5 million tonnes per annum at one train.