Chevron says it will work with the state government on appropriate conditions for its multi-billion dollar Gorgon gas project after the environmental watchdog reluctantly gave the go-ahead to expansion plans.
Chevron says it will work with the state government on appropriate conditions for its multi-billion dollar Gorgon gas project after the environmental watchdog reluctantly gave the go-ahead to expansion plans.
The Environmental Protection Authority (EPA) today gave "highly conditional recommended approval" to Chevron's expansion plans to Gorgon, located on Barrow Island.
EPA chairman Paul Vogel said the authority still retained its in-principle opposition to any development on Barrow Island, which is categorised as a Class A nature reserve.
However, since the previous government overruled in 2007 the EPA's recommendations advising against Chevron's initial two train development, Dr Vogel today said it was necessary to recommend the project in order to be a "player" in the management of the island's environment.
"The EPA is of the view that the proposal may be implemented if, and only if, stringent conditions are applied to manage those additional risks," Dr Vogel said.
The EPA today outlined a number of strict conditions on the Gorgon development, with particular emphasis on dredging, the impact on egg-laying female flatback turtles and carbon dioxide storage.
"The EPA has requested that should recommended conditions not be imposed, then the proposal be remitted back to the EPA for fresh advice," Dr Vogel said.
He added that since the project has a life of 60 plus years, the EPA has requested the state Environment Minister consider conducting five yearly reviews of the environmental performance of the entire Gorgon project.
Chevron, along with partners Shell and Exxon Mobil, last year submitted to the EPA a proposal for a three-train development, which has the capacity to produce 15 million tonnes of gas each year.
Analysts have tipped the project to cost around $20-30 billion while Premier Colin Barnett recently said the cost is expected at $50 billion.
Chevron Australia's Greater Gorgon Area general manager Colin Beckett told WA Business News that partners will review the conditions and decide how to work it into the project's forward plan.
"We'll work with the Minister and her office to work out what are appropriate conditions," Mr Beckett said.
"I think it's a bit early to speculate on which conditions will emerge from the recommendations.
"The key thing here is there are a couple of areas that the EPA considers important, which is turtles and dredging, and we agree with them."
The EPA has recommended that an "unaltered light horizon", in comparison with the current natural conditions, be achieved in relation to flatback turtles.
It means the Gorgon project and associated infrastructure should not emit any more light than what is currently necessary.
The EPA has also recommended that "real time" monitoring take place while dredging and marine infrastructure occur.
Additionally, Dr Vogel said if carbon storage could not be achieved on Barrow, which was one of the main selling points for locating Gorgon on the island due to the presence of a suitable aquifer, then the proposal should be remitted back to the EPA.
The report is open to a two-week public appeal period. Both state and federal environment ministers need to give approval for the project to go ahead, with state approval expected in the next few months.
The final go-ahead from the projects partners is expected to be made in the second half of 2009.
Mr Beckett said Chevron is currently developing a detailed cost estimate for the project.
"We're going out to bid now and we're hoping to get appropriate pricing based on 2009 prices to reflect the current global financial crisis rather than the overheated market that we had in 2007/08," he said.
The Chamber of Commerce and Industry of WA, the Chamber of Minerals and Energy and Mr Barnett have today welcomed the EPA's recommendations.
Mr Barnett said Gorgon will create about 6,000 jobs, with more than 3,500 direct and indirect jobs sustained throughout the life of the project.
"Not only will this project provide a significant and positive boost to the State's economy, it has the potential to boost Australia's gross domestic product by more than $60 billion," he said.
The Premier's announcement is below:
Addressing the stringent environmental conditions outlined by the Environmental Protection Authority (EPA) will be of paramount importance for the Liberal-National Government in enabling the Gorgon project to go ahead.
Premier Colin Barnett said that the EPA's conditional approval of the project was of great environmental and economic significance to the State.
"Barrow Island is a significant Class A nature reserve with very high and unique conservation and environmental values," Mr Barnett said.
"The waters surrounding Barrow Island also have high environmental values, especially the project's potential impact on one of the most significant flatback turtle rookeries in Western Australia.
"The EPA's report rightly highlights measures that need to be taken to protect this environment, and there is a strong commitment on behalf of the State Government to ensure the highest environmental standards for this project are met."
The Premier said the Gorgon project - with three gas trains and a 15 million tonne per annum capacity - would create about 6,000 jobs, with more than 3,500 direct and indirect jobs sustained throughout the life of the project.
"Not only will this project provide a significant and positive boost to the State's economy, it has the potential to boost Australia's gross domestic product by more than $60billion," he said.
"In the current economic climate, enabling this project to progress after being stalled for so long will be a great boon for WA, but the environmental issues will be front and centre in enabling it to be developed.
"As has been shown with other projects progressed by this Government in recent months, economic development can progress in partnership while adhering to the highest possible environmental standards."
The proposed development includes:
- development of the Gorgon and Jansz gas resources in Commonwealth waters with subsea pipelines linked to Barrow Island (an A Class Nature Reserve)
- a gas processing facility on Barrow Island consisting of three 5 Mt/a LNG trains and LNG shipping facilities
- a 300tj/d domestic gas plant and pipeline to deliver gas to the mainland
- greenhouse gas management via injection of carbon dioxide into deep formations beneath Barrow Island
- the project received State and Commonwealth environmental approval for a two train 10Mtpa LNG development (including the Domgas and geosequestration) in late 2007.
The EPA's report will be open for a 14-day public consultation period (closing May 14).
The Minister for the Environment will consider and determine any appeals which are lodged.
The Federal Government will also need to make a decision on progressing the proposal for a third gas train on the island.
The EPA's report is available at http://www.epa.wa.gov.au
