Australian Minister for Resources and Energy, Martin Ferguson, has confirmed that ExxonMobil's Australian division has signed a gas supply contract with India's Petronet worth AU$ 25 billion over 20 years. ‘The Government hopes this new partnership with India will grow to be as significant as our LNG export trade with our friends in East and North-East Asia,’ Mr Ferguson said in a statement. ‘We are a country built on foreign investment, and investments which develop our natural resources to the benefit of all Australians will continue to be welcomed by the Australian Government.’
Petronet LNG is one of India's fastest-growing companies, and the off-take agreement would bring the Gorgon project nearer to a final investment decision. The project involves the development of approximately 30 subsea wells, with these subsea production facilities connected to the LNG plant at Barrow Island by subsea pipelines.
Partners ExxonMobil and Petronet will sell 1.5 million tpy of LNG to India for the next 20 years, making it Australia's first long-term LNG supply contract with India. Yet to give final approval to the project are Gorgon joint venture partners Chevron, ExxonMobil and Royal Dutch Shell. However, the Indian deal is seen as a major movement towards securing approval.
ExxonMobil Australia Vice President Luke Musgrave has been quoted as saying, ‘We welcome Petronet LNG as a foundation customer for the Gorgon LNG project and look forward to a long and successful relationship.’
AU$ 50 billion project
The AU$ 50 billion Gorgon Gas project will be built on Barrow Island, a nature reserve about 70 km off Western Australia. The reserve has produced oil for the last 50 years, and the Western Australian government has given the project final environmental approval. Gorgon, which should be running by 2014, will be operated by Chevron Australia, ExxonMobil and Shell, and is expected to create 6000 jobs and provide an estimated AU$ 40 billion in federal royalties over 30 years.
Western Australia’s Environment Minister Donna Faragher has confirmed that higher levels of environmental protection had been established. Part of this involved including an extra AU$ 30 million to safeguard a colony of endangered flatback turtles near Barrow Island. In addition to this, only a maximum of 3% of the total coral area off the east coast of Barrow Island should be lost to dredging, and monitoring this will be extended beyond impact zones.
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