Energy Sector - 2

[Naresh]

<b>Australia approves huge gas project to supply China, India</b>

SYDNEY : Australia on Wednesday approved a massive energy project that will supply natural gas worth tens of billions of dollars to China and India, giving new impetus to its resources boom.

Environment Minister Peter Garrett imposed 28 conditions to protect wildlife but said he saw no reason to block the Gorgon liquefied natural gas (LNG) plant off Western Australia, removing its final regulatory hurdle.

<b>The project is a joint venture by Chevron, Shell and ExxonMobil, which has signed a record 41 billion US dollar contract with Chinese giant PetroChina and another worth 21 billion dollars with India’s Petronet.</b>

“I’ve considered it very carefully, I don’t believe that there will be unacceptable (environmental) impacts and, as a consequence of that, I have made my decision today,” Garrett told reporters.

The Gorgon field, thought to hold more than 40 trillion cubic feet of gas, is expected to create thousands of jobs and pump billions of dollars into Australia’s economy.

Chevron, majority partner in the project, welcomed Garrett’s approval and said a final investment decision on the yet-to-be developed plant would be made in the coming months.

“The Gorgon project is Australia’s largest single resource project and is set to deliver significant economic benefits and create around 10,000 indirect and direct jobs during peak construction,” said Roy Krzywosinski, the company’s Australian managing director.

He said the plant was “globally and nationally significant”, with an economic life of at least 40 years, adding it had been sited to minimise environmental impact.

Trade Minister Simon Crean said the deal was a major boost to Australia’s profile as a green energy provider and proof China saw it as a key partner in its growth.

“This is a commitment by China to a long-term contract. They see Australia as part of its energy supply, but not just any energy clean energy,” Crean told reporters.

“The trade relationship with China continues to grow very strongly. The recent gas deal, there’s a huge case in point.”

Intense demand from the emerging economies of China and India for resources has underpinned a period of stellar growth for Australia’s mining and energy sectors.

Trade with Beijing, the world’s largest consumer of iron ore and coal, was worth 58 billion US dollars last year alone.

Australia is the world’s seventh-largest exporter of LNG and Chevron said the Gorgon project would secure Australia’s position as a leading gas producer and generate a new source of wealth for the resource-rich nation.

According to trade officials, demand for LNG far exceeds supply and it is seen as the oil and gas industry’s greatest growth area, particularly as customers look for cleaner energy sources.

Garrett said the extra conditions included measures to protect endangered turtles and other species on nearby Barrow Island and to minimise noise and light emissions.

“It is acceptable for the expansion to go ahead subject to the conditions,” he said. “The public can have confidence that the environment of Barrow (Island) will be properly protected.”

Garrett said he expected Chevron and the venture’s other partners would be “more than willing” to meet the conditions.

“We have had those discussions with the company and it is the case that there is agreement on the basis of the conditions that I’ve put forward, and I welcome that,” he said.

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