19/08/2009 - 06:48

WA's biggest-ever resource deal signed

19/08/2009 - 06:48

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Western Australia has signed its biggest-ever resources deal overnight, a $50 billion agreement to export liquid natural gas to China.

WA's biggest-ever resource deal signed

Western Australia has signed its biggest-ever resources deal overnight, a $50 billion agreement to export liquid natural gas to China.

Energy giant PetroChina has agreed to buy 2.25 million tonnes of LNG a year for 20 years worth $50 billion, underpinning the massive Gorgon natural gas project to be developed off Western Australia by joint venture partners Chevron, ExxonMobil and Shell.

The project is expected to provide six thousand jobs at the peak of construction and comes a week after a $25 billion deal to supply gas to India.

Minister for Resources and Energy Martin Ferguson said the Gorgon project will be a major boost to our export income along with contracts to sell around $300 billion worth of LNG to customers in the Asia-Pacific over the next 20 years.

The deal follows months of diplomatic tension over China's arrest of Australian Rio Tinto executive Stern Hu and the visit to Australia by Uighur community leader Rebiya Kadeer.

The landmark $50 billion Gorgon gas deal will not only underpin Australia's resources sector, but it's also a win for clean energy, Mr Ferguson said.

Aside from the commercial benefits, Mr Ferguson claimed the deal was good for the environment.

"LNG is also part of a movement to low emissions fuel economy because it is clean energy," he told ABC Radio on Wednesday.

"So it's important to Australia in an export sense, but it's also important to India and China that we also go forward on the climate change challenge."

Gorgon is slated to begin construction next year and would be the biggest single construction project in Australia's history, Mr Ferguson said.

It is expected to provide 6,000 jobs at its peak.

The site of the project, Barrow Island, has yet to receive environmental approval, but Mr Ferguson said the government was working at pace to assess it.

 

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