12/08/2008 - 09:57

Gorgon partners approve $1bn study

12/08/2008 - 09:57

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The three partners in the Gorgon gas project have approved spending of $1 billion and the employment of 1200 staff and constractors ahead of a final investment decision over the coming 12 to 18 months.

Gorgon partners approve $1bn study

The three partners in the Gorgon gas project have approved spending of $1 billion and the employment of 1200 staff and constractors ahead of a final investment decision over the coming 12 to 18 months.

Chevron Australia general manager, Greater Gorgon Area, Colin Beckett also announced today that the liquefied natural gas project would include a 300 terrajoule per day domestic gas plant.

In a speech to potential suppliers, Mr Beckett was upbeat about Gorgon, which has been under consideration for more than a decade and faced numeous environmental and financial hurdles.

"There is a real sense of energy flowing through the Gorgon Project participants and team and a determination to deliver on the development of this world-class resource," Mr Beckett said.

The project is likely to cost in excess of $20 billion and will provide a big boost for local industry. The Chamber of Commerce and Industry WA said businesses stand to reap $33 billion from the project.

The domestic gas plant would contribute significantly to the state's domestic energy supply.

The importance of securing new sources of domestic gas in WA was underlined recently when Apache Energy's Varanus Island gas processing facility was shut down after a pipeline explosion, slashing the state's supply by 370 TJ per day.

The state consumes about 1,000 TJ per day of domestic gas.

Mr Beckett said the project would "incorporate a domestic gas phase as part of our foundation project".

"Under our state agreement [with the WA government], we were initially planning to submit a proposal for development of a 300 TJ per day domestic gas plant by 31 December 2010 but we now plan to accelerate this to coincide with our development proposals to Government for the LNG phase," Mr Beckett said.

"That means when we consider FID (final investment decision), we will consider FID for both LNG and domestic gas with the domestic gas plant ready for start-up to coincide at or around the commissioning of the project's third LNG train.

"Bringing on Gorgon's domestic gas phase earlier will increase the number of supply points for domestic gas into WA and has been welcomed by the State Government.

"In December, the project endorsed a change in scope from two to three 5Mtpa [million tonnes per annum] LNG trains and a final investment decision is expected after approval has been provided by the State and Commonwealth for the Gorgon project's third train proposal."

The project is a joint venture between Chevron, Exxon-Mobil and Shell.

State Development Minister Eric Ripper today said the announcement was a "vindication" of Premier Alan Carpenter's domestic gas policy, which requires producer to provide the equivalent of up to 15 per cent of LNG production for domestic use.

"This is exactly what the Government has been seeking in our discussions with the Gorgon joint venturers and the announcement reflects the new arrangements we have agreed to," Mr Ripper said.


 

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