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Chevron aims to boost Gorgon output

PERTH, Australia, May 2 (UPI) -- Chevron applied on Monday to increase production at its $45 billion Gorgon natural gas project off Western Australia by 5 million tons a year, The Australian newspaper reports.

That would raise annual output at Gorgon, scheduled for production by 2014, from 15 million tons to 20 million tons by adding an extra processing unit, or train. Chevron aims to add a fifth train eventually, thus boosting total production to 25 million tons a year.

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Considered the largest single resource natural gas project in Australia's history, Gorgon is 50 percent owned by Chevron and 25 percent each by ExxonMobil and Shell.

But the Greens party said Chevron was turning the site of the project on Barrow Island -- a Class A Nature Reserve -- into an industrial park. On its Web site, Chevron says that with a 15 million ton capacity, the project would occupy 1.3 percent of the island's un-cleared land mass, and the location is recognized internationally as a location where industry and the environment co-exist.

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Chevron said in its application Monday that it had considered processing the gas at another site such as Pilbara on the mainland but prefers using the existing facility under construction on Barrow Island.

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"Using an alternative location may result in losing LNG market opportunities to an international competitor and/or losing industrial gas customers to alternative investments due to delays in reaching commercial agreements," Chevron said in the application.

The project could boost Australia's gross domestic product by $64 billion over 30 years, Chevron says, and employ around 10,000 people at peak construction.

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Not going ahead with further development, Chevron said, would result in "the loss of economic benefits to the nation, state and region that would increase general economic growth and sustain regional development."

Chevron said construction of the fourth train would begin after the first three units are in place.

Missing the opportunity for the expansion "would deny Australians and Western Australians the associated social benefits such as an increase in community services and highly skilled employment opportunities," the company said.

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The Sydney Morning Herald reported last month that the construction of a jetty crucial to the project had been delayed by nearly six months because of a dispute between contractors.

But Chevron Australia Managing Director Roy Krzywosinski said significant construction milestones had been reached over the past year and the project remains on schedule for its first gas production in 2014.

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