Australia okays A$50bn LNG project
August 27, 2009
By Ben Sharples and Gemma Daley
Australia has approved Chevron's A$50 billion (R325.5bn) liquefied natural gas (LNG) venture on a remote island, adding conditions to quell environmental concerns about the nation's biggest resources project.
The additional terms for the Gorgon project would enable it to proceed within a nature reserve "without unacceptable impacts", environment minister Peter Garrett said yesterday.
Chevron has said the venture off the northwest shelf might produce its first LNG in 2014.
The decision clears one of the final obstacles to Chevron, Shell and Exxon Mobil building the venture on Barrow Island, 50km off the west Australian coast. Gorgon has contracts to supply fuel to China, India and Japan and is among more than 12 LNG projects in the region competing for Asian buyers.
"Gorgon is big and going to fill the available hole" for LNG demand, said Peter Arden, a Melbourne-based analyst at Ord Minnett. "There's a case for some of the proposed projects that if they don't move quickly then it may get congested and some might not make it."
The Gorgon partners will make a development decision after they win production licences from the Australian government and development approvals from the Western Australian state government, according to Nicole Hodgson, a Chevron spokeswoman.
Combined with Woodside Petroleum's Pluto project due to come on line in 2011, Gorgon would leapfrog Australia to second place behind Qatar among global LNG producers.
Australia ranked sixth among LNG exporters last year, according to BP's review of energy.
Gorgon will have capacity to produce 15 million tons of LNG a year, according to Chevron.
Environmentalists have opposed developing Gorgon and an oil spill in the Timor Sea off the coast of Australia's Kimberley wilderness region five days ago renewed concerns over exploration.
Australian Greens senator Rachel Siewert attacked the decision, claiming Garrett was "signing off on the destruction of this unique environment".
"Barrow Island is an A-Class nature reserve," Siewert said. "It has been dubbed 'Australia's Ark' for its unique range of endangered species."
The 202km2 island is home to flatback turtles, along with the burrowing bettong.
Chevron must submit plans for approval covering the protection of animals such as the spectacled hare-wallaby, the bettong and the golden bandicoot, among 28 more conditions for the project. - Bloomberg
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