Gorgon LNG project will provide enormous benefits to State/national economies

4/5/98

Australia's most wealthy resource proposal, the $9 billion Gorgon liquefied natural gas (LNG) project planned for Western Australia's Burrup Peninsula, will provide enormous benefits to the State and national economies, WA Resources Development Minister Colin Barnett said today.

Officially opening Gorgon's exhibition stand at the LNG 12 conference in Perth, Mr Barnett said all Australians should recognise the huge contributions the project would make to the nation's economic well-being.

These included:

+ more than 4000 jobs 'on-site' during the peak construction period in 2001-02 and up to 90,000 new jobs directly and indirectly across Australia, including 17,000 in WA;

+ $5 billion to be spent in Australia to 2010 on local materials, labour and services;

+ annual exports worth $1.5 billion from 8 million tonnes per annum of LNG;

+ an increase in Australia's Gross Domestic Product (GDP) of around 1.5 per cent or $7 billion annually, including $2.2 billion for WA (4 per cent of Gross State Product); and -

+ many new business opportunities across Australia, particularly in the Pilbara region through increased demand for products and services resulting in more retail, entertainment and recreational facilities.

"The Gorgon project, along with the North West Shelf Gas Project's planned $8.4 billion expansion, will increase WA's LNG production to around 23 million tonnes per annum, worth an estimated $4.5 billion each year at current world prices," Mr Barnett said.

The Gorgon project is being developed by WAPET - West Australian Petroleum Pty Ltd - which comprises Chevron Asiatic Limited (28.57 per cent), Texaco Oil Development Company (28.57 per cent), Shell Development (Australia) Pty Ltd (28.57 per cent), and Mobil Exploration & Producing Australia Pty Ltd (14.29 per cent).

In 1995, the Gorgon project was given priority for development by the WA Government.

This was followed by the Federal Government granting of Major Project Facilitation (MPF) status to the proposal in November 1997. MPF status provides the project with coordinated approval processes at Federal level.

In January this year WAPET announced it had awarded major engineering and design contracts to a consortium of contractors Clough Ltd, Kvaerner Oil & Gas and Schlumberger Ltd. A joint State-Commonwealth environmental assessment is currently investigating environmental impacts including water, land, air and noise. The report is expected to be formally released for public review in June 1998.

"WA industry is well placed to contribute to the Gorgon project's development because of the State's engineering design and construction capabilities that have been developed to service the existing oil and gas industry," Mr Barnett said.

The Minister said this expertise had been demonstrated by the development of the East Spar gas field and the Wandoo B platform.

"The high level of WA industry participation in these projects (East Spar 75 per cent and Wandoo 70 per cent) has ensured that substantial benefits have flowed on to the WA economy."

Mr Barnett congratulated WAPET on its commitment to using local industry for the project's development.

The Gorgon project involves five sub-sea well clusters installed in about 200m of water and tied back to a gravity based platform located in 100m of water. The platform will be used for separating gas and liquids, dehydrating the gas and controlling flow through a trunkline to the Burrup Peninsula. Here the gas will be liquefied through to process trains and stored prior to shipment through a load out jetty. Gorgon LNG will be marketed to Korea, China, India and Taiwan.

Media contact: Justine Whittome, (08) 9222 9699