Chevron Makes Final Investment Decision to Construct Gorgon Natural Gas Project
Chevron Corporation today announced that its subsidiary, Chevron Australia Pty Ltd, will proceed with the development of the Gorgon natural gas project offshore Western Australia. Development proposals for the project were approved today by the Western Australian State Premier the Hon. Colin Barnett, MLA, and production licenses were granted by the Australian Minister for Resources and Energy the Hon. Martin Ferguson AM, MP.
"With a total resource base of more than 40 trillion cubic feet of gas and an estimated economic life of at least 40 years, Gorgon will be a major contributor to our company's future growth," said Chevron Chairman Dave O'Reilly.
"Gorgon adds significant long-term reserves and production for Chevron, bolstering our strong resource replacement and underscoring the importance of Australia to our growing natural gas business," said George Kirkland, executive vice president, Global Upstream and Gas, Chevron Corporation.
The Gorgon Project, operated by the Australian subsidiary of Chevron (50 percent*) in joint venture with Australian subsidiaries of ExxonMobil (25 percent) and Shell (25 percent), is currently estimated to cost AU$43 billion (US$37 billion) for the first phase of development. First gas is planned for 2014.
The Greater Gorgon Area's projected natural gas resources are equivalent to 6.7 billion barrels of oil. The project's scope includes a three-train, 15 million-metric-ton-per-year liquefied natural gas (LNG) facility and a domestic gas plant.
The project underwent a rigorous and thorough environmental assessment that culminated with some of the most stringent conditions imposed on a major project anywhere in the world. The project is expected to have the world's largest carbon dioxide injection system and be a global leader in underground carbon dioxide injection technology.
* Chevron's stake will change from 50 percent to 47.75 percent once relevant approvals have been obtained on equity agreements with Osaka Gas and Tokyo Gas. As stated in a Chevron news release dated September 9, 2009, Chevron will supply Osaka Gas 1.375 MTPA of LNG for 25 years. Osaka Gas will purchase 1.25 percent equity in the Gorgon Project. Tokyo Gas will be supplied 1.1 MTPA over 25 years and will purchase a 1 percent equity stake. Supply from both agreements is expected to commence in the second half of 2014.
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