Gorgon a goer, says Chevron

CHEVRON expects front-end engineering design for the Gorgon gas project to be completed in 2009 with a final investment decision to follow soon after.
Gorgon a goer, says Chevron Gorgon a goer, says Chevron Gorgon a goer, says Chevron Gorgon a goer, says Chevron Gorgon a goer, says Chevron

"Other signposts will be re-engaging contractors and suppliers regarding Gorgon construction requirements later this year and signing supply base contracts to meet the construction and materials requirement for the project," Chevron general manager for Greater Gorgon Area Colin Beckett said at the APPEA conference yesterday.

He added that further gas discoveries in the Greater Gorgon Area had encouraged the joint venture partners - consisting of operator Chevon (50%), ExxonMobil (25%) and Shell (25%) - to re-shape the project.

ExxonMobil vice president established areas projects Alan Hirshberg said ExxonMobil was still some way from a final investment decision, but it was optimistic about Gorgon's potential and the partners' ability to manage the technical and commercial challenges.

"We're also actively engaged with potential LNG buyers in the Asia-Pacific region to ensure our share of Gorgon LNG is sold prior to any final investment decision," he said.

Hirshberg said Gorgon would have the world's largest carbon dioxide sequestration plant and the partners were in the process of finalising regulatory approvals and commercial agreements.

"Like all large capital projects these days, we've been confronted with an overheated global construction market that's pressuring project costs and resultant economics," Hirshberg said.

"In response, we've been focussing on increasing capacity to improve scale and project economics."

Chevron has said the project could eventually have five production trains, up from the two that were originally planned and the three that currently being mooted.

The Gorgon partners are currently seeking environmental approval for the third train on Barrow Island, after deciding to increase the project's size by 50%.

Gorgon had already received environmental approval for two 5 million tonne per annum trains at the end of last year.

Beckett said Gorgon would be a nation-building project.

"Gorgon is an iconic project which will change the face of Australia, in a way few other projects have done," he said.

"It is complex, it is challenging and it will be a multi-billion dollar investment. Our job just now is to make sure we get ourselves fully prepared for project execution. That requires using the skills and experiences of our three companies."

The project faces numerous environmental problems associated with its proposed siting on Barrow Island, an A-class nature reserve, and the high carbon dioxide content of its feedstock.

It has also been subject to numerous cost blowouts and budget revisions, and by late last year the budget was widely thought to be well over $20 billion.

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