Gorgon Go-Ahead Heralds a New Frontier for Australian Gas Development
PERTH, Western Australia, September 14 2009 - The development of natural gas off Western Australia is entering a new era after Chevron Australia Pty Ltd, the Australian subsidiary of Chevron Corp., announced that it will proceed with the development of the world-class Chevron-operated Gorgon Project today.
The final investment decision on the project was announced by the Gorgon Joint Venture participants – Chevron (operator with 50 percent interest1), and ExxonMobil and Shell (each with 25 percent interest1). The project is estimated to cost approximately AUD$43 billion for the first phase of development.
Initial work will begin immediately on Barrow Island. First gas is planned for 2014.
“Gorgon will supply cleaner burning natural gas for the growing Asia-Pacific and Australian markets, create thousands of jobs, and generate substantial revenue for Australia,” said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production.
The green light for the Gorgon Project was achieved after the granting of production licenses and final state development approval, which was received today at a signing ceremony attended by Western Australian State Premier the Hon. Colin Barnett, MLA and Australian Minister for Resources and Energy the Hon. Martin Ferguson AM, MP.
Speaking from the signing ceremony, Chevron Australia Managing Director, Roy Krzywosinski, thanked the Federal and State Governments for their support.
“Gorgon will be an important pillar of the Australian economy for the next 40 years,” Krzywosinski said. “We anticipate AUD$33 billion will be spent on Australian goods and services with flow-on effects cascading through the Western Australian economy.”
Krzywosinksi added, “Gorgon is a long term, technically complex project that will mark a step-change and dramatic advancement of engineering, developing new frontiers in up to 1300 metres of deepwater, and best practices in environmental management.
“To engineer, build and operate this project, we have brought together the best and brightest from Chevron, our partners and industry,” said Krzywosinski.
The Gorgon Project is Australia’s biggest single resource project and one of the world’s largest natural gas projects. At peak construction it is projected to generate about 10,000 direct and indirect jobs in Australia.
The Greater Gorgon Area is estimated to have resources of 40 trillion cubic feet of natural gas, the equivalent of 6.7 billion barrels of oil. The resource contains enough equivalent energy to power a city of one million people for 800 years.
Krzywosinski added: “Gorgon will be a global leader in the application of underground carbon dioxide injection technology. The decision to invest approximately AUD$2 billion to inject naturally occurring, reservoir carbon dioxide into a deep reservoir more than 2,000 metres beneath Barrow Island, is a clear demonstration of Chevron’s commitment to reducing greenhouse gas emissions.”
The project’s scope includes a three-train, 15 million-metric-tonne-per-annum liquefied natural gas (LNG) facility and a domestic gas plant.2
Chevron is one of the world's leading integrated energy companies and through its Australian subsidiaries, has been present in Australia for more than 50 years. With the ingenuity and commitment of more than 1,400 people, Chevron Australia leads the development of the Gorgon and Wheatstone natural gas projects; manages its equal one-sixth interest in the North West Shelf Venture; and operates Australia’s largest onshore oilfield on Barrow Island and the Thevenard Island oilfields. The company is also a participant in the Browse liquefied natural gas development and is a significant investor in exploration offshore northwest Australia, one of Chevron’s four global focus areas for exploration.
In addition, Chevron’s Perth-based Global Technology Centre provides technology support and solutions to the company’s operations in Australia and around the world. www.chevronaustralia.com
Notes to Editor:
1 Chevron’s stake will change from 50 percent to 47.75 percent once relevant approvals have been obtained on equity agreements with Osaka Gas and Tokyo Gas. As stated in a Chevron news release dated September 10, 2009, Chevron will supply Osaka Gas 1.375 MTPA of LNG for 25 years. Osaka Gas will also purchase 1.25 percent equity in the Gorgon Project. Tokyo Gas will be supplied 1.1 MTPA over 25 years and will purchase a 1 percent equity stake. Supply from both agreements is expected to commence in the second half of 2014.
2 Watch Gorgon Project Overview - Producing Liquefied Natural Gas in Australia