Gorgon gas project
Encyclopedia
The Gorgon gas project is a natural gas
project in Western Australia
, involving the development of the Greater Gorgon gas fields, subsea gas-gathering infrastructure, and a liquefied natural gas (LNG)
plant on Barrow Island
. The project also includes a domestic gas component. It is currently under construction and once completed, will become Australia's fourth LNG export development.
) The Gorgon field is centered about 130 kilometres (80.8 mi) off the north-west coast of Western Australia, where the water depth is approximately 200 metres (656.2 ft). Other fields in the group lie to the north, such as Jansz-Io, which covers an area of 2000 square kilometres (772.2 sq mi), in a water depth of 1300 metres (4,265.1 ft).
Barrow Island lies off the Pilbara coast, 85 kilometres (52.8 mi) north-north-east of Onslow
and 140 kilometres (87 mi) west of Karratha. The largest of a group of islands which include the Montebello and Lowendal Islands, it is 25 kilometres (15.5 mi) long and 10 kilometres (6.2 mi) wide, covering 235 square kilometres (90.7 sq mi).
which had been a pioneering company in the development of the Western Australian petroleum industry. WAPET was the operator on behalf of various joint ventures comprising Chevron
, Texaco
, Shell
and Ampolex (the exploration division of Ampol
). Chevron and Texaco merged in 2001, Mobil took over Ampolex, and later merged with Exxon to form ExxonMobil
. In 2000, Chevron became the operator of all WAPET's petroleum assets.
WAPET discovered Gorgon in 1981 with the drilling of the Gorgon 1 well. Later discoveries included Chrysaor (1994) and Dionysus (1996). The Jansz-Io gas accumulation, discovered in January 2000, contains an estimated 566 billion cubic meters of recoverable reserves.
The project received preliminary environmental approvals from the West Australian government in September 2007 and from the Federal Minister for the Environment in the following month. The project developers then submitted revised plans to cover an expansion in the size of the project. Final environmental approval was received from the state government on 11 August 2009. On 26 August 2009, the Federal Environment Minister announced that the expanded project on Barrow Island had been given conditional environmental approval.
During the 2007 Australian federal election campaign, the Australian Labor Party announced that a future Labor government would set aside 25% of future Petroleum Resource Rent Tax from the Gorgon project to establish a Western Australian Infrastructure Fund.
Using initially 18 wells, gas will be delivered via subsea gathering systems and pipelines to the north-west coast of Barrow Island, then via an underground pipeline system to gas treatment and liquefaction facilities on the island's south-east coast. The plant will consist of 3 liquefied natural gas (LNG) trains, each capable of producing a nominal capacity of five million tonnes per annum (MTPA).
Carbon dioxide (CO2), which comprises around 15% of the raw gas stream, will be stripped out then injected
into formations deep below the island. LNG and condensate
, initially stored in onshore tanks, will be offloaded from a 2100m jetty onto LNG carriers and oil tankers, for delivery to overseas customers.Natural gas
for domestic use will be exported by a 70 km subsea pipeline to the mainland, for transmission to local customers.
Although capital costs of major energy projects are generally not revealed by developers, media articles have reported analyst forecasts of estimated costs ranging from A$11 billion (in 2003), A$16 billion (2007), and A$50bn in March 2009 to A$43b in Sept 2009.
, India
, Japan
and South Korea
.
Chevron Australia has executed Sale and Purchase Agreements (SPAs) with Osaka Gas (1.375Mtpa for 25 years and 1.25 percent equity in the Gorgon Project), Tokyo Gas (1.1Mtpa for 25 years and 1 percent equity), Chubu Electric Power (1.44Mtpa for 25 years and 0.417 percent equity in the Gorgon Project) and GS Caltex of South Korea (0.5Mtpa for 20 years from Gorgon and Chevron system gas). Chevron Australia also has Heads of Agreements with Korea Gas Corporation (KOGAS) (1.5Mtpa for 15 years); Nippon Oil Corporation (0.3 Mtpa for 15 years) and Kyushu Electric ( 0.3 Mtpa for 15 years).
Shell has entered into long-term LNG sale and purchase agreements with PetroChina International Company Limited and BP Singapore Pte. Limited and also has secured capacity at LNG receiving terminals including the terminals at Energia Costa Azul in Baja California, Mexico and Hazira in Gujarat, India.
An Australian subsidiary of ExxonMobil has signed long-term sales and purchase agreements with Petronet LNG Limited of India and PetroChina International Company Limited for the supply of LNG from the Gorgon Project. The agreement with Petronet LNG is for the supply of approximately 1.5 Mtpa of LNG over a 20-year term while the agreement with PetroChina is for the supply of approximately 2.25 Mtpa over a 20-year term. Together, these two sales and purchase agreements commit the ExxonMobil subsidiary's share of LNG from the 15 Mtpa Gorgon LNG Project.
(classified as a vulnerable species) and numerous other animals not found on the Australian mainland. Other concerns are related to the adequacy of quarantine procedures on Barrow Island to protect against the introduction of non-endemic species, and risks associated with geological sequestration of CO2.
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
project in Western Australia
Western Australia
Western Australia is a state of Australia, occupying the entire western third of the Australian continent. It is bounded by the Indian Ocean to the north and west, the Great Australian Bight and Indian Ocean to the south, the Northern Territory to the north-east and South Australia to the south-east...
, involving the development of the Greater Gorgon gas fields, subsea gas-gathering infrastructure, and a liquefied natural gas (LNG)
LNG train
An LNG train is the term used to describe the liquefaction and purification facilities in a liquefied natural gas plant.In order to make it practical and commercially viable to transport natural gas from one country to another, its volume has to be greatly reduced...
plant on Barrow Island
Barrow Island (Western Australia)
Barrow Island is a island located northwest off the coast of Western Australia. The island is the second largest in Western Australia after Dirk Hartog Island.-Discovery and early history:...
. The project also includes a domestic gas component. It is currently under construction and once completed, will become Australia's fourth LNG export development.
Location
'Greater Gorgon' refers to a grouping of several gas fields, including Gorgon, Chandon, Geryon, Orthrus, Maenad, Eurytion, Urania, Chrysaor, Dionysus, Jansz/Io, and West Tryal Rocks, situated in the Barrow sub-basin of the Carnarvon BasinCarnarvon Basin
The Carnarvon Basin is a geological basin located in the north west of Western Australia. This is the main geological feature that makes up the North West Shelf...
) The Gorgon field is centered about 130 kilometres (80.8 mi) off the north-west coast of Western Australia, where the water depth is approximately 200 metres (656.2 ft). Other fields in the group lie to the north, such as Jansz-Io, which covers an area of 2000 square kilometres (772.2 sq mi), in a water depth of 1300 metres (4,265.1 ft).
Barrow Island lies off the Pilbara coast, 85 kilometres (52.8 mi) north-north-east of Onslow
Onslow, Western Australia
Onslow is a coastal town in the Pilbara region of Western Australia, north of Perth. It currently has a population of around 573 people and is in the Shire of Ashburton Local Government Area....
and 140 kilometres (87 mi) west of Karratha. The largest of a group of islands which include the Montebello and Lowendal Islands, it is 25 kilometres (15.5 mi) long and 10 kilometres (6.2 mi) wide, covering 235 square kilometres (90.7 sq mi).
History
More than 200 exploration wells have been drilled in the Barrow sub-basin over the past 35 years, including West Tryal Rocks in 1972, and Spar in 1976 - both discovered by West Australian Petroleum (WAPET)WAPET
West Australian Petroleum Pty Ltd was a pioneer oil and gas exploration and processing company in Western Australia. Formed in March 1952 as a joint venture between Caltex and Ampol, the company discovered Australia's first flowing oil in November the following year, at Rough Range on the North...
which had been a pioneering company in the development of the Western Australian petroleum industry. WAPET was the operator on behalf of various joint ventures comprising Chevron
Chevron Corporation
Chevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
, Texaco
Texaco
Texaco is the name of an American oil retail brand. Its flagship product is its fuel "Texaco with Techron". It also owns the Havoline motor oil brand....
, Shell
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
and Ampolex (the exploration division of Ampol
Ampol
Ampol, the Australian Motorists Petrol Company, was incorporated by Sir William Gaston Walkley in 1936 in New South Wales. This was in response to Australians' concerns about perceived inequitable petrol pricing, and allegations of transfer pricing by foreign oil companies to limit their tax...
). Chevron and Texaco merged in 2001, Mobil took over Ampolex, and later merged with Exxon to form ExxonMobil
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...
. In 2000, Chevron became the operator of all WAPET's petroleum assets.
WAPET discovered Gorgon in 1981 with the drilling of the Gorgon 1 well. Later discoveries included Chrysaor (1994) and Dionysus (1996). The Jansz-Io gas accumulation, discovered in January 2000, contains an estimated 566 billion cubic meters of recoverable reserves.
The project received preliminary environmental approvals from the West Australian government in September 2007 and from the Federal Minister for the Environment in the following month. The project developers then submitted revised plans to cover an expansion in the size of the project. Final environmental approval was received from the state government on 11 August 2009. On 26 August 2009, the Federal Environment Minister announced that the expanded project on Barrow Island had been given conditional environmental approval.
During the 2007 Australian federal election campaign, the Australian Labor Party announced that a future Labor government would set aside 25% of future Petroleum Resource Rent Tax from the Gorgon project to establish a Western Australian Infrastructure Fund.
Gas fields
The Gorgon and Jansz-Io gas fields, 200 kilometres (124.3 mi) from the coast are said to contain 35.3 Tcuft of natural gas and may have a lifespan of 60 years.Developers
The project is being developed by the Gorgon Joint Venture, which consists of Australian subsidiaries of three international energy companies:- Chevron Australia (a subsidiary of ChevronChevron CorporationChevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
) (47% share and project operator) - Shell Development Australia (a subsidiary of Royal Dutch ShellRoyal Dutch ShellRoyal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
) (25%) - Mobil Australia Resources (a subsidiary of Exxon Mobil) (25%)
- Osaka Gas (1.25%)
- Tokyo Gas (1%)
- Chubu Electric Power (0.417%)
Scope
- 300 ha of land has been acquired on Barrow IslandBarrow IslandBarrow Island is the name of at least three islands:*Barrow Island *Barrow Island, Cumbria, England*Barrow Island...
- 3x5 MTPA LNG Trains
- 15 million tonnes of LNG per year
- 300 terajoules per day domestic gas plant
- Ground breaking occurred on December 1, 2009
- First LNG in 2014
- Production ends between 2054–2074
Using initially 18 wells, gas will be delivered via subsea gathering systems and pipelines to the north-west coast of Barrow Island, then via an underground pipeline system to gas treatment and liquefaction facilities on the island's south-east coast. The plant will consist of 3 liquefied natural gas (LNG) trains, each capable of producing a nominal capacity of five million tonnes per annum (MTPA).
Carbon dioxide (CO2), which comprises around 15% of the raw gas stream, will be stripped out then injected
Carbon capture and storage
Carbon capture and storage , alternatively referred to as carbon capture and sequestration, is a technology to prevent large quantities of from being released into the atmosphere from the use of fossil fuel in power generation and other industries. It is often regarded as a means of mitigating...
into formations deep below the island. LNG and condensate
Natural gas condensate
Natural-gas condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields....
, initially stored in onshore tanks, will be offloaded from a 2100m jetty onto LNG carriers and oil tankers, for delivery to overseas customers.Natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
for domestic use will be exported by a 70 km subsea pipeline to the mainland, for transmission to local customers.
Although capital costs of major energy projects are generally not revealed by developers, media articles have reported analyst forecasts of estimated costs ranging from A$11 billion (in 2003), A$16 billion (2007), and A$50bn in March 2009 to A$43b in Sept 2009.
Benefits
Economic modelling carried out in 2008 as part of the environmental impact assessment process, forecast the following macroeconomic impacts (based on a 30-year period):- 6000 jobs in Western Australia at the peak of the construction phase
- more than 3500 direct and indirect jobs sustaining throughout the life of the project
- an increase in national Gross Domestic Product (GDP) of A$64.3 billion (in net present value terms)
- A$33 billion of expenditure on locally purchased goods and services
- additional government revenue of about A$40 billion (in 2009 dollars)
LNG export agreements
LNG sales agreements have been reached between the joint venturers and customers in ChinaChina
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
and South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
.
Chevron Australia has executed Sale and Purchase Agreements (SPAs) with Osaka Gas (1.375Mtpa for 25 years and 1.25 percent equity in the Gorgon Project), Tokyo Gas (1.1Mtpa for 25 years and 1 percent equity), Chubu Electric Power (1.44Mtpa for 25 years and 0.417 percent equity in the Gorgon Project) and GS Caltex of South Korea (0.5Mtpa for 20 years from Gorgon and Chevron system gas). Chevron Australia also has Heads of Agreements with Korea Gas Corporation (KOGAS) (1.5Mtpa for 15 years); Nippon Oil Corporation (0.3 Mtpa for 15 years) and Kyushu Electric ( 0.3 Mtpa for 15 years).
Shell has entered into long-term LNG sale and purchase agreements with PetroChina International Company Limited and BP Singapore Pte. Limited and also has secured capacity at LNG receiving terminals including the terminals at Energia Costa Azul in Baja California, Mexico and Hazira in Gujarat, India.
An Australian subsidiary of ExxonMobil has signed long-term sales and purchase agreements with Petronet LNG Limited of India and PetroChina International Company Limited for the supply of LNG from the Gorgon Project. The agreement with Petronet LNG is for the supply of approximately 1.5 Mtpa of LNG over a 20-year term while the agreement with PetroChina is for the supply of approximately 2.25 Mtpa over a 20-year term. Together, these two sales and purchase agreements commit the ExxonMobil subsidiary's share of LNG from the 15 Mtpa Gorgon LNG Project.
Domestic gas
Under the provisions of the Barrow Island Act (2003), the joint venturers are required to reserve 2000 petajoules of gas for delivery into the domestic market. The Gorgon Joint Venture announced plans to establish a domestic gas project, including plans for progressive expansion to enable delivery of 300 terajoules of gas per day into the domestic transmission system. Chevron have indicated that deliveries of Gorgon domestic gas will commence around the time of start-up of the third LNG train.Criticisms
The proposed project has attracted criticism from conservation groups in relation to the potential impact upon Barrow Island's ecology. The island is a Class A nature reserve, and home to the flatback turtleFlatback Turtle
The flatback sea turtle is a sea turtle that is endemic to the continental shelf of Australia. Flatback turtles belong to the Cheloniidae, or sea turtle, superfamily and are the only species found in the genus Natator....
(classified as a vulnerable species) and numerous other animals not found on the Australian mainland. Other concerns are related to the adequacy of quarantine procedures on Barrow Island to protect against the introduction of non-endemic species, and risks associated with geological sequestration of CO2.