MELBOURNE, Sept. 10 -- The Gorgon LNG project off Western Australia, with facilities on Barrow Island, has moved a step closer to implementation, having received preliminary environmental approval for two trains of 5 million tonnes/year each.
However, a new scoping study has led the Chevron-led Gorgon partners Royal Dutch Shell PLC, Chevron Corp., and ExxonMobil Corp.to consider adding a third train to produce a total of 15 million tonnes/year of LNG. If that decision is made, it would require further environmental studies and approvals.
Meanwhile, China has forged two sales deals for Western Australian LNG this weekthe strongest sign yet that Gorgon will move forward.
Shell Australia concluded a binding heads of agreement to sell PetroChina 1 million tonnes/year of LNG for 20 years, primarily from Gorgon gas. A detailed agreement will be conditional on the Gorgon partners reaching a final investment decision before December 2008.
Shell also still has preliminary agreements to send Gorgon gas to India and to an import terminal in Baja California.
Browse basin gas
The second sales deal, for Browse basin gas, was reported in Sydney Sept. 6.
Woodside Petroleum Ltd. agreed to key terms with PetroChina for the potential sale of 2-3 million tonnes/year of LNG over 15-20 years from Woodside's Browse project, which includes the development of Torosa (formerly Scott Reef), Brecknock, and Calliance (formerly Brecknock South) gas fields some 430 km north of Broome off Western Australia. The three fields have gas reserves of about 20 tcf and lie in water averaging 800 m deep.
The agreement, which hinges on a final investment decision for the Browse project, anticipates deliveries start-up in 2013-15. Although terms were kept confidential, the expectation is for revenues of $35-45 billion (Aus.).
Woodside and partners BHP Billiton, Chevron, BP, and Shell aim to have determined an optimum development concept for Browse basin fields during 2008.
The interests in the various permits over the field areas vary, but Woodside has just under 50% overall. Although the latest agreement is with Woodside, it provides for the addition of LNG entitlements for the other partners to be commingled in sales.