Sept. 13, 2009, 11:03 p.m. EDT
Gorgon mega-project gets final approval
Australian natural-gas venture expected to begin producing in 2014
By Michael Kitchen, MarketWatch

LOS ANGELES (MarketWatch) -- Chevron Corp. said Monday it has received final approval from the Western Australian government for the massive Gorgon natural gas project, setting the stage for Australia's largest-ever resource venture.

The project -- undertaken along with Exxon Mobil Corp. and Royal Dutch Shell Plc. -- is expected to cost $37 billion. Chevron said it should begin yielding gas in 2014.

Chevron also said its stake in the venture will change from 50% to 47.75% once relevant approvals have been obtained on a previously announced equity agreement with Osaka Gas Co. and Tokyo Gas Co. Meanwhile, Exxon and Shell will each own 25%.

The Gorgon project, which includes liquefied natural gas facilities, intends to tap into 40 trillion cubic feet of natural gas, more than doubling the size of Australia's currently largest LNG terminal, as Australia moves to meet rising demand from Asia.

On Thursday, Chevron said it signed deals worth about $60 billion to supply liquefied natural gas to Japan and South Korea from Gorgon. The agreements call for a total supply of nearly 3 million tons per year of LNG to Osaka Gas, Tokyo Gas and GS Caltex.

Last month, Exxon signed a 20-year deal worth an estimated $41 billion to supply liquefied natural gas from Gorgon to China's top energy firm PetroChina Co. It also signed a pact with Petronet LND of India. See full story on Gorgon sales.

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Largely overlooked amidst all the hoopla over the huge $37 billion Gorgon natural-gas deal in Australia was the thing that may have made it possible in the first place: The Australian government’s willingness to shoulder the long-term liability for storing carbon emissions underground.

Chevron Says Gas Find Will Underpin Gorgon Project
By James Paton

Oct. 19 (Bloomberg) -- Chevron Corp., operator of the A$43 billion ($39 billion) Gorgon liquefied natural gas project, said it has made a discovery off Western Australia that may support an expansion of the venture.

Chevron found gas at its Achilles-1 well, about 160 kilometers (100 miles) northwest of Onslow in the Gorgon area, the San Ramon, California-based company said in a statement today.

The Gorgon venture with partners Exxon Mobil Corp. and Royal Dutch Schell Plc is the largest of at least a dozen planned LNG projects in Australia seeking to tap rising demand in Asia for cleaner fuels. Gorgon is due to start exporting LNG in 2014. Competition for gas to supply the proposed processing plants is increasing, JPMorgan Chase & Co. analyst Mark Greenwood said.

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