Western Australia wins huge Chinese gas contract

8/8/02
Western Australia's North West Shelf Venture has won a 25-year contract worth up to $25billion to supply liquefied natural gas (LNG) to China.
Premier Geoff Gallop, who visited China to lobby for the WA bid in July last year, described the historic contract win as a major milestone in the State's economic development and our trade relations with China.
"This is a momentous day for our State and I warmly congratulate Australia LNG and the North West Shelf Venture," Dr Gallop said.
"This contract will help guarantee our economy continues to grow strongly with real and significant benefits for all Western Australians.
"A further expansion of our LNG industry will create thousands of new jobs directly and indirectly and generate hundreds of millions of dollars of royalty revenue for the State."
The Premier said the deal firmly reinforced WA's strong, mutually beneficial relationship with China, which is already one of the State's top three export destinations.
"This contract will play an important role in establishing a strategic energy partnership between WA and China," he said.
"WA welcomes the decision by the Chinese Government and appreciates the opportunity we have been given to be the first to supply LNG to China."
China is conducting a pilot LNG project in Guangdong Province, consisting of the supply of LNG and construction of an import terminal and major gas pipelines around the Pearl River delta and Hong Kong, to provide gas to power stations and local reticulation networks for industrial, commercial and residential consumption.
The North West Shelf Venture will supply about three million tonnes of LNG per year to the Guangdong LNG Terminal and Trunkline Project, with first deliveries starting in late 2005.
Dr Gallop said the State Government had worked closely with Australia LNG and the Federal Government in support of the industry's marketing efforts in China.
"This will be the biggest LNG contract with a single customer ever won by WA, and will result in a fifth LNG train being built at the North West Shelf Venture plant in the Pilbara, in addition to the fourth train presently under construction," he said.
State Development Minister Clive Brown said the contract further emphasised the importance of the Pilbara and the Burrup industrial precinct as powerhouses of the Australian economy.
"The further expansion of the Woodside facility, and the successful development of the six proposed gas processing projects in the Burrup industrial precinct, will add significantly to this importance," Mr Brown said.
"In particular, every Western Australian will benefit from the royalties received by the State, which will be used by the Government to improve community services and infrastructure."
Dr Gallop said the contract added a further dimension to WA's already significant trade relations with China, marked in particular by iron ore and alumina sales.
"China is expected to become a major market for LNG," he said.
"I am confident that by working together with their Chinese counterparts, NWS participants will be able to ensure the complete success of China's pilot LNG project in Guangdong Province."
Western Australian Government and Australian LNG industry representatives have been talking to the Chinese Government since late 1997 regarding the supply of LNG to China for power generation and urban gas reticulation in south-eastern coastal provinces and Hong Kong.
Dr Gallop made China his first overseas destination as Premier to underline the new Labor Government's support for Australia LNG bid, and was followed, most recently, by State Development Minister Clive Brown last month.
Australia LNG Pty Ltd is marketing agent for the six participants of Australia's North West Shelf Venture which is already a key supplier to the global LNG market. The venture is equally owned by BHP Billiton Petroleum (North West Shelf) Pty Ltd, BP Developments Australia Pty Ltd, ChevronTexaco Australia Pty Ltd, Japan Australia LNG (MIMI) Pty Ltd, Shell Development (Australia) Proprietary Limited and Woodside Energy Ltd.
Media contacts:
Kieran Murphy - Premier's Office - 9222 9475
Lisa D'Cruz - Minister Brown's Office - 9222 9699