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Financial Times: Deal opens way to Gorgon gas project

By Raphael Minder
Published: December 13 2006 00:28 | Last updated: December 13 2006 00:28

One of Australia’s biggest natural resources projects, the A$11bn (US$8.6bn) Gorgon gas venture operated by Chevron of the US, cleared a major hurdle on Tuesday when it settled a dispute with state authorities over protecting wildlife.

Mark McGowan, environment minister of Western Australia, said state government had “effectively given the green light” to the Gorgon project after setting “a raft of tough new environmental conditions”.

Colin Beckett, general manager of the project, told the FT: “This is a significant milestone and a major step forward for the project – there’s no question about it.”

Chevron has 50 per cent ownership. ExxonMobil and Royal Dutch Shell each owns 25 per cent.

Environmental opposition has questioned the time-table for delivering liquefied natural gas (LNG) by 2010. The project still requires approval at federal level.

Three years ago, the partners estimated Gorgon would cost A$11bn, but recent reports have suggested the bill could reach A$15bn to A$18bn.

Mr Beckett said on Tuesday the partners hoped to update investors about the cost increases in mid-2007.

Commenting on the recent estimates, he said: “We take no objection but we’re not adding to the speculation.’’

Gorgon is one of up to three large LNG projects due to begin production off Western Australia early in the next decade.

Copyright The Financial Times Limited 2006

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