Gorgon-Jansz gas gets interim marketing nod

The three joint venturers in the Gorgon-Jansz gas and LNG project in Western Australia have been given conditional interim authorization from the Australian Competition and Consumer Commission (ACCC) to market gas in the state.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, June 30 -- The three joint venturers in the Gorgon-Jansz gas and LNG project in Western Australia have been given conditional interim authorization from the Australian Competition and Consumer Commission (ACCC) to market gas in the state.

The approval enables Chevron Corp., ExxonMobil Corp., and Royal Dutch Shell PLC to talk to potential customers and obtain information relevant to the project’s final investment decision expected later this year.

ACCC Chairman Graeme Samuel said authorization was unlikely to result in irreversible changes to the market because any gas sales agreements reached during this period would be conditional on final authorization.

The move has disappointed the so-called DomGas Alliance, which represents Western Australia’s largest customers and which told the ACCC in early June that it opposed the request for joint marketing.

Alliance Chairman Stuart Hohnen pointed out that vigorous gas competition was important for businesses and households. He said a lack of competition had resulted in gas prices recently four or five times those in eastern Australia on a delivered basis.

The ACC has addressed this issue by only allowing the interim authorization to take place after the Gorgon partners had their ring-fencing arrangements independently audited, and any changes required to make them effective had been implemented.

The commission will make a draft determination by September following a public comment period.

The Gorgon-Jansz project includes a three-train LNG plant with total capacity of 15 million tonnes/year alongside a domestic gas plant capable of supplying 300 TJ/day of gas to the Western Australian grid. Gas is scheduled to come on stream in 2014.

Chevron is operator with 50%. ExxonMobil and Shell have 25% each.

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