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Australia's biggest resources project deliver a boost to WA's economy

January 1, 2018

Source: The West Australian

Australia’s biggest resources project — the Gorgon gas plant off the Pilbara — will deliver a much-needed boost to the WA economy after oil giant Chevron gave the go-ahead for the $5.1 billion second stage of the project.

Chevron will today end a guessing game about when it would pull the trigger on stage two by announcing funding to ensure the $69 billion project can continue to produce its targeted 15.6 million tonnes of LNG a year.

Gorgon is one of the world’s biggest, costliest and most complicated energy projects.

About 10,000 workers were needed to build the sub-sea infrastructure and massive processing facility on the environmentally sensitive Barrow Island, 140km west of Karratha.

After 10 years of planning and construction, the first cargo of LNG left Barrow in March 2016. Since then more than 250 cargoes have been loaded on tankers and sent to Asia.

The domestic gas plant began producing for the WA market in December 2016. After being processed on Barrow, it is piped south to the mainland and pumped into the Dampier-to-Bunbury pipeline.

The domestic plant can supply 200 terajoules of gas a day, about one-fifth of the State’s needs, and there are plans to boost that capacity to 300 terajoules.

Gorgon stage two will include 11 new wells drilled thousands of metres below sea level off the coast. Seven wells will be drilled in the giant Gorgon field, about 150km north of Onslow. Four will be sunk in the Jansz-Io field, 70km further out to sea.

The Weekend West understands stage two will cost $US4 billion ($5.1 billion), with local suppliers expected to reap benefits from the investment in new infrastructure.

Drilling should start next year and the full expansion could take about four years.

“Benefits are expected to flow through to Australian industry, arising from local project management, drilling and completion activities and sub-sea infrastructure installation,” Chevron Australia managing director Nigel Hearne said.

“Our world-class natural gas facilities have transformed Chevron into a leading and reliable supplier of cleaner burning natural gas to customers in the region.

“Through ongoing collaboration, we need to invest in the infrastructure and the local skills and capability required to maintain our long-term energy position and contribute to the jobs of the future.”

Premier Mark McGowan welcomed Chevron’s announcement, saying it would deliver a significant boost to WA’s economy.

“The State Government is delighted to work together with Chevron Australia to ensure the benefits to West Australians are maximised on this project long into the future,” he said.

“The Gorgon project is one of the biggest resources projects in Australia’s history, delivering jobs to thousands of WA workers and big benefits to the wider economy.

“This investment is another sign that WA is getting back on track — the economy is improving, confidence is up and jobs are being created.” Gorgon is operated by Chevron, with ExxonMobil (25 per cent), Shell (25 per cent), Osaka Gas (1.25 per cent), Tokyo Gas (1 per cent) and JERA (0.417 per cent) as joint venture partners.

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