Australia approves massive LNG project

CANBERRA, Australia, Aug. 26 (UPI) -- The Australian government Wednesday gave environmental approval to the massive Gorgon multibillion-dollar liquefied natural gas project.

Today's go-ahead from Environment Minister Peter Garrett represents the final hurdle for Gorgon's joint venture partners Chevron, Shell and Exxon Mobil to build the giant LNG plant, the largest resources project in Australia and its largest export deal.

Gorgon already has contracts to supply fuel to China, India and Japan. Last week a $50 billion deal was signed to supply LNG from Gorgon to PetroChina over the next 20 years.

Chevron says Gorgon will have the capacity to produce 15 million metric tons of LNG a year, Bloomberg reports.

Australia's current LNG output is 20 million tons annually. With Gorgon and Woodside Petroleum Ltd.'s Pluto project, due to come on line in 2011, that amount could swell to 100 million tons, more than double LNG global leader Qatar's current output, said Peter Clearly, president of North West Shelf LNG.

The LNG plant, to be built on Barrow Island off the West Australian coast, is expected to create 6,000 jobs.

Western Australia will earn about $100 million a year from Gorgon revenue, state Premier Colin Barnett said Wednesday, Bloomberg reports. Chevron estimates Gorgon's contribution to Australia's gross domestic product at $64 billion.

The overall Barrow Basin gas project is estimated to be worth $300 billion in total gas sales, with $200 billion in already existing commitments, The Age reports.

Garrett has imposed 28 environmental conditions that the Gorgon partners must meet in order to pursue the project. The 78-square-mile Barrow Island, dubbed "Australia's Ark," is home to a number of endangered and rare species, including the threatened flatback turtle.

"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 Wednesday.

Garrett said he visited Barrow Island with Chevron representatives to be assured that the plant would not adversely affect the environment.

"The Gorgon Project has been deliberately sited to avoid areas of particular conservation significance," Roy Krzywosinski, managing director of Chevron's Australia unit, said in a statement.

But Greens leader Sen. Bob Brown is not convinced. He said the government made a mistake in approving the project and should have forced it to relocate to the mainland to protect several endangered species.

An oil leak from a rig off the coast of Western Australia's Kimberly wilderness region on Friday further renewed environmentalists' opposition to developing the Gorgon field. Australian Greens Sen. Rachel Siewert denounced today's decision on Gorgon as "signing off on the destruction of this unique environment."