Gas review may set standard

IN an industry first, ChevronTexaco has put to the State Government and stakeholders an extensive environmental, social and economic review underpinning the use of Barrow Island to develop a quarter of Australia’s known gas reserves.

Forty trillion cubic feet of gas lie undeveloped in the Greater Gorgon area gas fields 130 kilometres off WA’s north west coast, and ChevronTexaco and partners Shell and ExxonMobil say the Barrow option is the only one that will allow economic development in the near term.

The ESE review, requested by the State Government, has been touted by some as a model for WA’s future approvals processes for large-scale developments.

The WA Government is sure to take notice of the economic figures presented in this review.

Initial investment value is put at $6 billion, with a further $5 billion over the first 20 years of development.

Net export figures to 2030 have been estimated at an annual $2 billion, while company tax and Petroleum Rent Tax forecasts total $17 billion.

New permanent job figures are forecast to be around 1,700 for WA and 6,000 nationally.

While waiting for the Barrow green light, the Gorgon partners will by no means be idle.

Marketing efforts are continuing in earnest.

These include for LNG to South Korea, China, Japan and the North American west coast, and for local onshore domestic and industrial supply.

That’s not to mention the potential for a gas-to-liquids partner, most likely also on Barrow.

The venture partners need access to Barrow to be able to shore up custom, and before moving towards a project-specific environmental impact study.

But whether a proposed Barrow operation will be an LNG plant or an integrated facility, the total space the Gorgon partners are requesting for the life of the development is 300 hectares.

ChevronTexaco is pointing to its record as operator of the Barrow Island oil field over 40 years while preserving the island as a Class A nature reserve.

Although 900 wells have been drilled on the island and three million barrels of oil produced, total use of the island is currently 65ha, less than 5 per cent.

As the oil field continues to decline over the next two decades, associated areas of the island will be rehabilitated, meaning the only remaining impact on the island will eventually be the gas facilities and associated infrastructure.

ChevronTexaco is also under-pinning its case for environmental responsibility with a plan to dispose of all carbon dioxide from the Gorgon gas through re-injection into saline reservoirs two kilometres below Barrow.

ChevronTexaco has been using re-injection in the Northern Hemisphere to enhance oil field recovery, and re-injection entirely for carbon dioxide disposal purposes has been successful in Norway.

At the request of the WA Government to demonstrate net conservation benefits, the Gorgon partners are also proposing to set up a foundation with an initial $10 million.

Under management by the State Government, academics, NGOs, and ChevronTexaco, the foundation will identify and implement regional island and marine environment con-servation projects based on Barrow’s conservation principles.

The Gorgon partners can keep costs low with the use of subsea systems rather than platforms and with reinjection, but a Barrow pro-cessing location is the critical element in offering a competitive price.

The cost of a pipeline all the way from the fields to shore is prohibitive, but a processing plant on Barrow also ultimately would allow a line from the island delivering natural gas into the Dampier to Bunbury natural gas and Goldfields gas transmission pipelines.

“We’re not looking at any other option,” Gorgon external affairs manager Peter Coghlan said.

“Having looked at all the locations, there’s unlikely to be an alternative that will be competitive enough.”

Should Gorgon get a third quarter in-principle approval for restricted access to Barrow, construction should commence in 2005 and first gas could be delivered in 2008, Mr Coghlan said.