Gorgon to reach first shipment milestone

The Gorgon Project is set to ship its first cargo of LNG in a matter of weeks, a long awaited milestone for the delayed project.

Shadow minister for Resources Gary Gray praised workers, unions and companies for their hard work towards achieving completion of the project.

“The Gorgon project is shipping its first cargo of LNG this week and the APLNG joint venture has recently celebrated its own first cargo shipment,” Gray said.

Gorgon is the second major LNG project to make its first shipment in 2016, following the first shipment from the Origin, ConocoPhillips and Sinopec joint venture Australia Pacific LNG (APLNG) on January 9.

“These projects will be a major contributor to Australia’s continued prosperity through revenue, training, engineering skills formation and community and regional development for decades to come,” Gray said.

“Australia now exports gas from the East, North and West coasts, utilising all available technology platforms and is pioneering in Co2 geosequestration.

“We have much to be proud of.”

The Gorgon LNG project is expected to produce a nameplate 15.6 million tonnes of gas per annum, with a domestic gas plant to deliver 300 terajoules per day to the Western Australian market.

Located on Barrow Island of the coast of Western Australia, Gorgon is a joint venture between Chevron Australia as the operator (47.3 percent), ExxonMobil (25 per cent), Shell (25 per cent), Osaka Gas (1.25 per cent), Tokyo Gas (1 per cent) and Chubu Electric Power (0.417 per cent).

The project earned notoriety for ongoing delays and cost blowouts, with the original start date scheduled for early 2015.

The original cost of $US37 billion, which was quoted in 2009 when the project was approved, blew out to more than $US54 billion, or $74 billion AUD.

It is estimated that the 2.1km loading jetty cost more than $4 billion, from a budgeted cost of $900 million.

In an address to the Press Club in February, federal resources minister Josh Frydenberg highlighted that LNG export earnings between 2011-12 and 2014-15 had increased by more than 40 per cent, largely due to new LNG projects coming on line in Queensland.

“Driven by increased volumes and a lower Australian dollar, export earnings are expected by 2019-20 to almost triple to $49 billion,” Frydenberg said.

Frydenberg said the Gorgon, Wheatsone, Pluto and North West Shelf LNG projects in Western Australia would contribute $160 billion in taxes and royalties.

“This revenue flow is just part of the economic dividend that comes from being the number one exporter of iron ore in the world, the number one exporter of coal in the world, the number one exporter by 2020 of LNG in the world, having the largest known reserves of uranium in the world and being in the world’s top five for deposits of copper, gold, bauxite, lead, zinc, nickel and lithium.

“The global demand for gas will increase by 50 per cent between now and 2040 and as we are soon to be the largest exporter of LNG in the world, this makes us the principal beneficiary.”

Increased supply of LNG from Australia and waning demand in Asia has been linked to falling LNG prices on the global market, with a 17 year low of $US1.67 per MMBtu reached this week.


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