Thursday, August 27, 2009

Chevron A$50 billion project wins Australia approval

Australia approved Chevron Corp.’s A$50 billion ($42 billion) liquefied natural gas venture on a remote island, adding stricter conditions to quell environmental concerns about the nation’s biggest resources project.

The additional terms for the Gorgon project will enable it to proceed within a nature reserve “without unacceptable impacts,” Environment Minister Peter Garrett said in Canberra on Wednesday. Chevron has said the venture off the northwest shelf may produce its first LNG in 2014.

The decision clears one of the final obstacles to Chevron, Royal Dutch Shell Plc and Exxon Mobil Corp. building the venture on Barrow Island, 50 kilometers (32 miles) off the West Australian coast. Gorgon has contracts to supply fuel to China, India and Japan and is among more than 12 LNG projects in the region competing for Asian buyers.

“Gorgon is big and going to fill the available hole” for LNG demand, said Peter Arden, a Melbourne-based analyst at Ord Minnett Ltd., an affiliate of JPMorgan Chase & Co. “There’s a case for some of the proposed projects that if they don’t move quickly then it may get congested and some might not make it.”

The Gorgon partners will make a development decision after they win production licenses from the Australian government and development approvals from the Western Australian state government, Nicole Hodgson, a Chevron spokeswoman, said on Wednesday.

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