Annoucement by North West Shelf project partners regarding $6 billion expansion

17/10/96

Resources Development Minister Colin Barnett said today the announcement by the North West Shelf project partners regarding a $6 billion expansion proposal gave very strong indications that the climate was right in Western Australia for resource investment of major proportion.

At a meeting in Osaka, Japan this week, the North West Shelf joint venture partners formally submitted a proposal for a $6 billion two-train expansion of the project which would be on stream by 2003 or earlier. The proposal was presented by the partners to the partners' Japanese power and gas utility customers following a letter of indication received earlier this year.

Mr Barnett said the proposal represented the third stage of the North West Shelf project, already the largest resource development project in Australia's history and valued currently at $12 billion.

"This is a very important step in ongoing negotiations between the partners and their Japanese customers and signifies their strong confidence in Western Australia and its future," he said.

"The proposal will see the virtual doubling of production of liquefied natural gas (LNG) for export from 7.5 million tonnes to 14.5 million tonnes per annum. Construction would be expected to begin in 1998-99.

"Japan remains Western Australia's most important customer for LNG and in this regard, the North West Shelf partners have an unsurpassed record as suppliers into this market.

"But, in addition to the Japanese market, there are clear indications of expanding markets in other countries in the Asia region.

"I am very confident that WA is favourably positioned to make the most of these opportunities. Thanks to the North West Shelf gas reserves and those of the West Australian Petroleum (WAPET) joint venture's Gorgon gasfield, the State has the resources to meet future LNG production for the export market.

"Currently, LNG exports are worth $1.35 billion to the State and this looks set to increase."

Mr Barnett said that the construction phase of the existing North West Shelf project generated 4,000 jobs at its peak. He said he understood that a similar number of jobs would be generated under the $6 billion expansion proposal.

The Minister said that as well as the positive impact of this construction phase, the project provided ongoing overall benefits to WA's economy.

"The North West Shelf project currently involves a total investment of $12 billion. Investing half of that again under this new proposal is clearly very significant and indicates that Western Australia is in the prime position for major resources industry investment," he said.

"The State Government will work closely with the joint venture partners to ensure the project proceeds in an orderly fashion and that maximum benefits reach local industry and the small business sectors."

Media contact: Justine Whittome (09) 222 9699