South Korea's Hyundai Heavy Industries and GE Oil and Gas have been awarded a collective $2.46 billion worth of work on the Gorgon gas project, taking the total amount of contracts awarded to just under $9.5 billion.
South Korea's Hyundai Heavy Industries and GE Oil and Gas have been awarded a collective $2.46 billion worth of work on the Gorgon gas project, taking the total amount of contracts awarded to just under $9.5 billion.
Hyundai won a $2.06 billion order for a natural gas facility on the Gorgon liquefied natural gas project in a long-expected deal that comes as a relief for the sluggish shipbuilding industry.
In a statement released today, Hyundai announced its success in the bid for module fabrication for the Barrow Island LNG plant, which is expected to produce a projected $64 billion boost to Australia's gross domestic product over 30 years as well as employment of about 10,000 people at peak construction.
Hyundai, the world's biggest shipbuilder, will build modules for the Gorgon project, by 2013 after outbidding rivals Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries and McDermott International in the bid.
With the decline in shipping amid the deteriorating global economy, ship makers have turned their attention to energy development vessels and plants to overcome the downturn in the sector.
HHI's bid for the Gorgon project was originally made in February and consists of 48 modules weighing about 190,000 tonnes with a contract price of more than $US2 billion, the biggest single contact in the company's history.
The contract is effective October 1 with the modules expected to be delivered by 2012-13.
Meantime, GE Oil and Gas announced today that it had secured a $400 million contract to provide equipment to drive LNG production and the project's carbon dioxide sequestration project, which will be the world's largest.
Gorgon will have three trains to produce a total of 15 million tonnes of LNG each year while six trains will be required for the sequestration project.
GE said the carbon sequestration project will inject up to four times more carbon dioxide than any other project worldwide.
The $400 million contract is GE's second Gorgon contract with the company having been awarded in May last year a five-year agreement to supply subsea equipment and support services.
Today's contract wins lifts the total amount of work awarded by Chevron to $9.46 billion.
The only other contract larger than Hyundai's is the $2.7 billion contract awarded to the Kellogg JV, led by Kellogg Brown and Root and includes Perth-based Clough, JGC Corporation and Hatch.
Operators of the Gorgon project are Chevron Corp (50 per cent) and its partners, Royal Dutch Shell (25 per cent) and ExxonMobil (25 per cent).
Gorgon is expected to cost $43 billion in the first phase of development, with first gas planned for 2014, with the project set to be an important pillar of the Australian economy for more than 40 years.
The GE announcement is below:
GE Oil & Gas Awarded $400 Million Contract for Gorgon, One of the World's Largest Natural Gas Projects
GE Turbomachinery To Drive LNG Production and World's Largest C02 Injection Project in Australia
FLORENCE, ITALY and PERTH, AUSTRALIA - October 22, 2009 - GE Oil & Gas today announced it has been awarded a competitive bid, worth over $400 Million, to deploy advanced liquefied natural gas (LNG) technology for the development of Gorgon, one of the world's largest untapped natural gas fields, which also features the world's largest ever carbon-dioxide (CO2) sequestration technology project.
Claudi Santiago, President and CEO of GE Oil & Gas said: "I am delighted that GE Oil & Gas has been selected by Chevron to deliver this technologically complex project which will deliver cleaner energy on an unprecedented scale. The contract consolidates our global LNG technology leadership position and our competitive edge in pioneering CO2 sequestration applications. Gorgon demonstrates our customer commitment to Innovation Now solutions based on safe and reliable technology transfer and our partnership role in milestone projects shaping the future of world energy".
GE will supply Chevron with equipment to fulfill Gorgon's LNG production and CO2 sequestration, as follows:
- Three (3) Main Refrigerant Compression Trains required for Gorgon's production of 15 million tonnes per annum (MTPA) LNG - equating to three shipments a week leaving Gorgon's purposebuilt LNG loading jetty; and,
- Six (6) Compression Trains required to drive Gorgon's pioneering carbon dioxide sequestration (C02) project, the world's largest - injecting up to four times more carbon dioxide than any other
project worldwide.
Cleaner Natural Gas Vital to Fuelling Global Economic Growth
According to the Energy Information Administration, between now and 2030 global energy consumption is projected to increase by 44 percent with oil and gas, along with coal, continuing to meet the largest part of that demand.
The demand for natural gas - the cleanest burning fossil fuel, which plays a vital role in balancing economic growth and environmental responsibilities - is expected to grow by more than 67 percent by 2030.
The Gorgon Project's estimated economic life is at least 40 years from the time of start-up. In addition to natural gas supply for domestic Australian use, Gorgon is critical to meeting Asia's growing need for cleaner energy. To date the Gorgon partners have signed sale and purchase agreements for LNG export into Japan and South Korea, the world's two largest LNG import markets, as well as India and China.
Globally, the net impact of using Gorgon LNG will result in about 45 million tonnes less greenhouse gas emissions, when compared with coal. That's equivalent to taking around two-thirds of all Australian vehicles off the road.
GE Innovation Now Technology Makes The Difference
The Gorgon natural gas fields are located at Barrow Island, around 130km off Western Australia. Gas will be extracted and delivered via subsea and underground pipelines to gas treatment and
liquefaction facilities on Barrow Island's south east coast.
Three (3), 5-MTPA GE Main Refrigerant Compression Trains, each comprising two GE Frame-7 Gas Turbines plus advanced technology liquefaction compressors, will be utilized for the production of liquefied natural gas by chilling to -160°C, ready for shipping, before re-gasification and pipeline transportation for use by domestic and industrial customers.
Prior to liquefaction carbon dioxide (CO2) will be stripped out and injected into the depleted natural gas wells 1,300-meters deep to ensure its safe storage and the reduction of emissions.
Six (6) surface operating, 15 MW electric-motor driven GE Compression Trains will be deployed.
The GE Main Refrigerant Compression Trains and the GE Compression Trains for CO2 sequestration will be manufactured and tested in Florence and Massa, Italy, then shipped in 2011 and 2012.
Contract Consolidates GE's Strategic Role in Gorgon
Today's award further strengthens GE Oil & Gas' strategic role in the Gorgon project. In May 2008 GE Oil & Gas' Drilling and Production business was awarded a five (5) year frame agreement to supply subsea equipment and support services for Gorgon. The scope of that contract includes the supply of VetcoGray manifolds, pipeline termination structures, pipeline end terminations, trees with subsea control modules, wellheads, production control systems, system integration testing, installation and operations support .
