x Abu Dhabi, UAEWednesday 17 January 2018

Australia's giant Gorgon gas project moves forward

Australia's grants environmental clearance for the Gorgon gas project, advancing a massive energy development that places it behind only Qatar in size.

Australia has given environmental clearance to the Gorgon gas project, advancing a massive energy development that could vault the country into second place behind Qatar for exports of liquefied natural gas (LNG) while unlocking about 40 trillion cubic feet of gas resources. The project's backers, Chevron, Royal Dutch Shell and Exxon Mobil, are to decide within the next few months whether to invest about A$50 billion (Ch154bn) in Gorgon, which would be Australia's biggest resources development.

If and when completed, the massive project would produce up to 15 million tonnes per year of LNG from several gasfields off the coast of Western Australia, boosting the country's output of the supercooled gas by roughly 75 per cent from last year's level of about 20 million tonnes. The project partners, which are marketing their gas separately, have so far signed long-term agreements to supply as much as 6.5 million tonnes per year of LNG to customers in China, Japan, South Korea and India. Last week, Exxon Mobil agreed to sell 2.25 million tonnes of LNG per year to China for 20 years for a total value of A$50bn in what was hailed as Australia's biggest trade deal.

That provided a crucial boost for Gorgon, which is facing competition from about a dozen other LNG projects that are targeting the expanding Asia-Pacific gas market. Several are racing to sign up customers with a view to coming on-stream in 2014-15.