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It’s the biggest, as Gorgon taps into China
Gorgon partnership: Among those attending the Canberra ceremony to mark the
agreement for the supply of A$30 billion worth of LNG from the Gorgon project to China
were the President of CNOOC, Fu Chengyu, Western Australian Premier, Geoff Gallop, and
the Managing Director of ChevronTexaco Australia Pty Ltd, Jay Johnson.
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In Australia’s and the liquefied natural gas (LNG)
industry’s biggest single export deal, partners in
the Gorgon gas project have entered into an
agreement to supply China with 100 million tonnes of
LNG worth up to A$30 billion.
The deal, with the China National Offshore Oil
Company (CNOOC), was signed in Canberra on 24
October during a visit to Australia by China’s President
Hu Jintao. It coincided with the signing of a broader
trade and economic accord between Australia and
China.
“Past, present and future, we see Australia as our
important economic partner,” President Hu declared
during his visit.
This spells good news not only for Western
Australian-based LNG traders, but also several
mineral producers that have either established or are
currently forging new alliances and markets in China.
Western Australia’s Premier, Geoff Gallop, said the
agreement would further strengthen the State’s
reputation as a world-class supplier of high-quality,
competitively priced and environmentally friendly
energy, and would further enhance its growing
relationship with China.
The agreement anticipated that CNOOC would
buy an equity in the Gorgon gas project.
ChevronTexaco Australia Pty Ltd’s Managing
Director, Jay Johnson, said the agreement was
significant as it provided a basis to underpin the
commercialisation of the Gorgon field.
The Gorgon development received in-principle
approval in September, and a State Agreement was
signed to facilitate the establishment of gas
processing facilities on Barrow Island, off Western
Australia’s northwest coast.
CNOOC is currently involved in the development
of two LNG receival terminals in China, one in
Guangdong province, the other in Fujian.
CNOOC's President Fu Chengyu, who
accompanied the Chinese President on his visit to
Australia, said the Gorgon deal strongly reinforced the
ties of friendship between China and Australia, and
was a result of the good relations that had developed
over the last few years.
“We look forward to becoming an active and
constructive player in the Australian hydrocarbon
business as a Gorgon participant,” he said.
Key economic benefits for Western Australia from
the Gorgon project include:
• jobs for 3000 people during the construction phase
and 400 permanent jobs,
• 6000 indirect jobs across the nation,
• annual exports valued at A$2.5 billion,
• A$18 billion in royalties to the Federal and Western
Australian governments, and
• a A$2 billion per year boost to the State
economy.