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Oil & Gas

Energy giants sign off on Australian LNG project

September 14, 2009
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According to the Associated Foreign Press, energy giants Chevron, Shell and ExxonMobil have agreed to develop Australia''s massive Gorgon field, giving the final go-ahead to a liquefied natural gas (LNG) project worth hundreds of billions of dollars. Chevron said the joint venture partners would start work immediately on the plant, pumping 43 billion Australian dollars ($37 billion US) into the initial construction phase. Prime Minister Kevin Rudd said the project off Australia''s northwest, which is expected to begin production in 2014, would provide a valuable source of jobs and exports. "The Gorgon investment will be Australia''s largest-ever resources development and is expected to generate 300 billion Australian dollars (US $257 billion) in Australian export earnings," he said in a statement. The project is already underpinned by supply contracts with China, Japan, India and South Korea worth a combined 145 billion Australian dollars, including ExxonMobil''s record $50 billion dollar deal with PetroChina. Gorgon, the world''s largest LNG plant, will be built on Barrow Island, a nature reserve about 70 kilometers (44 miles) off Western Australia. The Australian government approved the project last month after imposing strict environmental conditions. ExxonMobil said Gorgon had an estimated 40 trillion cubic feet of natural gas, providing an important source of energy for Asia''s burgeoning economies. Chevron owns a 50-percent stake in Gorgon and will operate the plant, with ExxonMobil and Shell each holding 25-percent. Chevron said it was set to award construction contracts worth more than 10 billion dollars in coming months as building work gets underway. Gorgon is just one of a clutch of LNG projects planned in Western Australia and Queensland over the next decade that analysts say will see Australia challenge Qatar as the world''s major gas exporter. Australia exported 15.2 million tons of LNG worth 5.2 billion dollars in 2006, a figure the government estimates will quadruple to 60 million tons by 2015 if all planned projects proceed. The gas is liquefied for shipping abroad, where it is turned back into gas and distributed via a pipeline.
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