MELBOURNE, Sept. 14 -- The giant Gorgon-Jansz-Io LNG and domestic gas project off Western Australia has been given a final investment green light by the joint venture partners Chevron Corp., ExxonMobil Corp., and Royal Dutch Shell PLC.
In 2009 dollars, the cost of the development is $43 billion (Aus.).
With a total gas resource estimate of 40 tcf, the project will be the largest for resources development in Australia’s history.
Preparatory work on the proposed Barrow Island LNG and domestic plant site will begin immediately with full construction timed to begin in February 2010.
Contracts valued at $2 billion (Aus.) have already been let and a further $10 billion (Aus.) worth of contracts will be awarded before yearend.
First LNG deliveries are expected to start in 2014. Domestic gas is slated to come on stream by yearend 2015.
The project comprises two subsea pipelines, one each from subsea wells on the Gorgon and the Jansz-Io fields. The gas will be piped to Barrow Island where three 5 million tonne/year LNG trains will be constructed along with a 300 terajoules/day domestic gas plant. Domestic sales gas will be piped to the mainland to connect with the main Dampier to Bunbury gas trunkline. LNG will be shipped direct to customers overseas from a loading jetty to be built on Barrow.
Carbon dioxide extracted from the project—mostly from Gorgon field—will be geosequestered by injection directly into storage reservoirs 2,000 m beneath the island.
The estimated economic life of the project is presently put at 40 years.
Gorgon field was first discovered by West Australian Petroleum in 1981 while nearby Jansz and Io were found in the 1990s by ExxonMobil and BP PLC, respectively.
Chevron has signed sales agreements with Osaka Gas, Tokyo Gas, and GS Caltex (of South Korea) for a total of more than 4 million tonnes/year of LNG. ExxonMobil has sales agreements with Petronet of India and PetroChina for its share of LNG production. Shell has yet to confirm its supply deals.
Chevron has 50% of the project (47.75% once equity sales are approved to Osaka Gas and Tokyo Gas). ExxonMobil and Shell each have 25%.