Gorgon a priority: Ferguson

FEDERAL Resources Minister Martin Ferguson says the giant Gorgon liquefied natural gas project should be a priority for the federal and Western Australian state governments.
Gorgon a priority: Ferguson Gorgon a priority: Ferguson Gorgon a priority: Ferguson Gorgon a priority: Ferguson Gorgon a priority: Ferguson

"Our joint [federal and state government] priority now is getting the Gorgon investment," Ferguson told reporters at the Australian Petroleum Production & Association's 2009 National Oil and Gas Safety conference in Perth on Wednesday.

"It's an absolute priority, a real investment on the ground, real jobs and potentially the biggest investment ever in the history of Australia."

Ferguson's comments come after WA Premier Colin Barnett last week said he would force the Woodside-led Browse development to process gas at James Price point in the Kimberley.

"Recognise the policy position and deal with it," the Australian quoted Barnett as saying last week.

"The Browse Basin is the next frontier of petroleum development in Australia. It is an extraordinarily valuable asset and it is owned by the Australian people. That gas will be developed in the north in the Kimberley region."

Woodside has publicly stated that James Price Point is its preferred location for the LNG hub, however its partners BHP Billiton, BP, Chevron and Shell are yet to endorse the decision.

Ferguson told reporters he would be "delighted" to see an investment in the Kimberley because the investment would provide an opportunity to work with the indigenous community and create training and job opportunities.

"In respect to Browse, I work very closely to the WA government to make sure that considering the economics of Browse, a Kimberley gas hub is available.

"The Kimberley gas hub is a real option for consideration, however I'm not going to pre-empt any decision.

"Let's focus on Gorgon, that is real, that is now," he said.

Woodside is the largest interest holder and operator of the permits of the proposed Browse LNG development.

The Browse gas fields include the Torosa, Brecknock and Calliance discoveries, located offshore, around 425 kilometres north of Broome in Western Australia.

These fields contain a combined contingent resource of about 14 trillion cubic feet of dry gas and 370 million barrels of condensate.

The natural gas contained in the gas fields will primarily be converted into LNG for export to international markets.

Chevron's Gorgon project consists of the development of the Gorgon and Io/Jansz fields that will be linked by subsea pipelines to Barrow Island, where the three-train LNG plant - capable of producing 15 million tonnes of LNG per annum - will be located.

It will include a 300 terajoule per day domestic gas plant and pipeline to the mainland, as well as a carbon dioxide sequestration project aimed at storing the high CO2 levels present in Gorgon gas in deep formations beneath Barrow Island.

The project is also expected to generate billions of dollars in royalties and about 6000 jobs, with more than 3500 direct and indirect jobs sustained throughout its life.

Chevron expects to make a final investment decision on the project in the coming months.

The Gorgon partners are Chevron Australia (operator and 50%), Shell (25%) and ExxonMobil (25%).