Chevron refuses to back Canberra's figures
CHEVRON Australia, the operator of the nation's biggest resources project, Gorgon, has refused to endorse Federal Government estimates of the value of contracts signed to advance its $43 billion liquefied natural gas project.
After months of trumpeting the huge deals to supply LNG to Asia-Pacific region customers, few, if any, were surprised when Chevron and joint-venture partners ExxonMobil and Shell said they would proceed with Gorgon, a project that will boost Australia's gross domestic product by an estimated $65 billion.
Chevron Australia managing director Roy Krzywosinski said initial work on Gorgon, which will be based on Barrow Island, 50 kilometres off the West Australian coast, would begin in coming weeks. Major construction would start by the end of the year, and the first production from the three-train, 15 million-tonne-a-year project was expected by mid-2014.
''I am extremely proud to say that a new frontier in natural gas development is here, Gorgon is here and we are moving forward with the project,'' Mr Krzywosinski said.
Prime Minister Kevin Rudd welcomed the announcement, saying the project would support up to 10,000 direct and indirect jobs and boost export revenue. ''The Gorgon investment will be Australia's largest-ever resources development and is expected to generate $300 billion in Australian export earnings,'' he said.
Mr Krzywosinski refused to be drawn on suggestions that the Federal Government had inflated the value of recent LNG sales from Gorgon.
Last week, Chevron announced a binding agreement to export 3 million tonnes a year of LNG to Japan and Korea until 2039, a deal the Federal Government estimated to be worth $70 billion.
That followed a $50 billion contract between ExxonMobil and PetroChina that was hailed as Australia's largest trade deal. Last week, PetroChina said it did not believe the contract was worth as much as the Federal Government had stated.
''There is no such a conception of $US41 billion in the total trade value of the agreement as some media reported,'' PetroChina's parent company, China National Petroleum, said in a statement.
Mr Krzywosinski said the value of the contracts was commercially sensitive information that he would not comment on.
Pressed further on the total export value of Gorgon LNG sold by the joint-venture partners, Mr Krzywosinski said it was ''not information that we even track''.
Despite the lack of transparency on the Gorgon deals, there is no doubting the boon to the Australian economy, with more than $30 billion in contracts expected to go to Australian companies over the next 30 years.
Mr Krzywosinski said that included $10 billion in construction contracts. Analysts are tipping the estimated $130 million concrete contract will go to Cemex.
Gorgon has come a long way from the discovery of its first gas field in 1981. It now has the potential to supply 8 per cent of the world's LNG demand.
The project chief, Colin Beckett, said Australia's proximity to LNG-hungry Asia would give it an advantage over rivals such as Qatar - the world's biggest LNG producer.
''They are predominantly targeting their gas into Europe and the Atlantic basin … they are obviously a competitor in what is a global market,'' he said. ''But the outlook shows the Asian market will probably be the largest growth opportunity. So, clearly, we are in the right place in Australia to supply that market.''
Mr Beckett said Gorgon would draw labour from across Australia. He said there were no plans to bring in foreign workers but that was a matter for the contractors.