Gorgon start delayed

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This was published 14 years ago

Gorgon start delayed

A GO-AHEAD decision for the $50 billion Gorgon liquefied natural gas project on Barrow Island, off Western Australia, is tipped to have been pushed back to September 14.

The go-ahead for the development is being relied on to fire up WA's resources-dependent economy, which has been struggling in the wake of the global financial crisis because of widespread project deferrals and production cutbacks.

It was originally tipped to be given the go-ahead by the partners on August 31. The new date allows time for the WA Government to sign off on Gorgon's environmental clearances. There has also been talk that Chevron, the 50 per cent partner and operator, is using the pending go-ahead decision as leverage in talks with the WA and Federal governments on the status of its retention leases over gas reserves off WA.

The gas fields that make up the Gorgon project lie 130-200 kilometres off north-west WA, with gas processing in three "processing trains" with annual capacity of 5 million tonnes of LNG each to take place on Barrow Island.

The gas reserves of 40 trillion cubic feet represent 25 per cent of Australia's known gas. The other partners in the project are ExxonMobil (25 per cent) and Shell (25 per cent).

Chevron has already been awarding contracts for the development before the official go-ahead decision. More than $1.7 billion in services contracts have been awarded to date, the latest being a $46 million contract with ASX-listed Nomad Building Solutions.

BARRY FitzGERALD

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