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Australia to Decide on Chevron’s Gorgon LNG Next Week

Bloomberg.com

By Ben Sharples

Aug. 21 (Bloomberg) — Australia’s government will decide within days whether to give environmental approval for the Chevron Corp.-operated A$50 billion ($41 billion) Gorgon liquefied natural gas project.

“I will make a decision in the coming week,” Minister for the Environment, Heritage and the Arts Peter Garrett told reporters in Sydney today, a transcript from his office shows. San Ramon, California-based Chevron and its partners Exxon Mobil Corp. and Royal Dutch Shell Plc won environmental approval from the Western Australian state government earlier this month.

Gorgon is among more than 12 LNG projects proposed for Australia and Papua New Guinea that are competing for multiyear contracts from Asian buyers. Irving, Texas-based Exxon signed a $41 billion contract on Aug. 18 to supply fuel from the project to PetroChina Co. over 20 years.

The three Gorgon partners will make a development decision after Garrett’s ruling and once they have approvals for production licenses and construction plans, Nicole Hodgson, a Chevron spokeswoman, said by phone from Canberra today.

The companies applied to resources and energy minister Martin Ferguson for production licenses on Aug. 18, Prime Minister Kevin Rudd said in Parliament in Canberra yesterday.

The Australian and West Australian governments have agreed to jointly accept any long-term liability arising from the storage of carbon dioxide at Barrow Island as part of the Gorgon project.

State Premier Colin Barnett made the A$50 billion estimate of Gorgon’s construction costs in March, a figure that would make it the country’s biggest resources project. The venture has yet to release its own projection.

Gorgon will have capacity to produce 15 million metric tons of LNG a year, with the first shipments expected in 2014, according to Chevron. LNG is natural gas chilled to liquid form for transport by ship to destinations not connected by pipeline.

To contact the reporter on this story: Ben Sharples in Melbourne at [email protected]

Last Updated: August 21, 2009 00:25 EDT

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