The government of Western Australia approved Chevron’s Australian subsidiary to develop Gorgon, a gigantic offshore natural gas project. The project’s first phase is expected to cost $37 billion.
Gorgon contains more than 40 trillion cubic feet of gas, equivalent to 6.7 billion barrels of oil, and has an estimated economic life of at least 40 years, according to a statement from Chevron. The project will be developed by Chevron’s Australian subsidiary along with the Australian subsidiaries of ExxonMobil and Shell. First gas is expected in 2014.
Much of the project’s anticipated gas output is already committed, primarily to Asian customers. One 20-year LNG sales contract with Petro-China is valued at $41 billion, according to the Houston Chronicle. .
The joint venture managing the construction will be led by Houston-based engineering, procurement and construction firm KBR, the newspaper said. Construction plans include pipelines that will extend as far as 124 miles and a gas processing plant, three liquefaction plants and export terminals, all elements that will require considerable amounts of project and breakbulk cargo.
Plans for Gorgon also require meeting rigorous environmental conditions imposed by the Australian government, the company said. The project is expected to include the world’s largest carbon dioxide injection system and be a global leader in underground carbon dioxide injection technology. Construction is expected to get underway in February.
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