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Australia gas decision nears

Financial Times

By Peter Smith in Sydney

Published: April 6 2009 03:00 | Last updated: April 6 2009 03:00

Chevron’s huge Gorgon liquefied natural gas project off the coast of western Australia is set to be given the go-ahead in the coming months, establishing the project as one of the world’s biggest energy ventures.

The US oil group is still waiting for final approval from the Western Australia government, which is considering Gorgon’s environmental impact, but a decision is expected before mid-2009.

Colin Barnett, state premier, recently estimated the cost of developing Gorgon to be A$50bn (US$36bn), making it one of the largest projects in the world gas industry, although Chevron has not released a figure.

Gorgon has been described by David O’Reilly, Chevron’s chief executive, as the group’s top priority for 2009. The project could employ 6,000 people during its peak construction phase and the US group said that, based on annual production of 15m tonnes of LNG, it would boost Australia’s gross domestic product by about A$64bn, in net present value terms, over 30 years.

Chevron will operate Gorgon and has a 50 per cent stake in the venture, with 25 per cent held by ExxonMobil and Royal Dutch Shell.

The greater Gorgon area is estimated to contain 40,000bn cu ft of gas.

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