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