Gorgon gas project


The Gorgon gas project is a multi-decade natural gas project in Western Australia, involving the development of the Greater Gorgon gas fields, subsea gas-gathering infrastructure, and a liquefied natural gas plant on Barrow Island. The project also includes a domestic gas component. Construction was completed in 2017.

Location

'Greater Gorgon' refers to a grouping of several gas fields, including Gorgon, Chandon, Geryon, Orthrus, Maenad, Eurytion, Urania, Chrysaor, Dionysus, Jansz/Io, and West Tryal Rocks, situated in the Barrow sub-basin of the Carnarvon Basin. The Gorgon field is centered about off the north-west coast of Western Australia, where the water depth is approximately. Other fields in the group lie to the north, such as Jansz-Io, which covers an area of, in a water depth of.
Barrow Island lies off the Pilbara coast, north-north-east of Onslow and west of Karratha. The largest of a group of islands which include the Montebello and Lowendal Islands, it is long and wide, covering.

History

More than 200 exploration wells were drilled in the Barrow sub-basin over the past 35 years, including West Tryal Rocks in 1972, and Spar in 1976 - both discovered by West Australian Petroleum which had been a pioneering company in the development of the Western Australian petroleum industry. WAPET was the operator on behalf of various joint ventures comprising Chevron, Texaco, Shell and Ampolex. Chevron and Texaco merged in 2001, Mobil took over Ampolex, and later merged with Exxon to form ExxonMobil. In 2000, Chevron became the operator of all WAPET's petroleum assets.
WAPET discovered Gorgon in 1981 with the drilling of the Gorgon 1 well. Later discoveries included Chrysaor and Dionysus. The Jansz-Io gas accumulation, discovered in January 2000, contains an estimated 566 billion cubic meters of recoverable reserves.
The project received preliminary environmental approvals from the West Australian government in September 2007 and from the Federal Minister for the Environment in the following month. The project developers then submitted revised plans to cover an expansion in the size of the project. Final environmental approval was received from the state government on 11 August 2009. On 26 August 2009, the Federal Environment Minister announced that the expanded project on Barrow Island had been given conditional environmental approval.
During the 2007 Australian federal election campaign, the Australian Labor Party announced that a future Labor government would set aside 25% of future Petroleum Resource Rent Tax from the Gorgon project to establish a Western Australian Infrastructure Fund.

Gas fields

The Gorgon and Jansz-Io gas fields, from the coast are said to contain of natural gas and may have a lifespan of 60 years.

Developers

The project was developed by the Gorgon Joint Venture, which, consisted of Australian subsidiaries of three global energy companies:
The scope of the project includes:
Using initially 18 wells, according to the Environment Impact Statement of 2009, gas was to be delivered via subsea gathering systems and pipelines to the north-west coast of Barrow Island, then via an underground pipeline system to gas treatment and liquefaction facilities on the island's south-east coast. The plant was intended to consist of 3 liquefied natural gas trains, each capable of producing a nominal capacity of 5.2 million tonnes per annum.
Carbon dioxide, which comprises around 15% of the raw gas stream from the Gorgon field, will be stripped out then injected into formations 2 kilometers below the island. This forms the world's largest carbon capture and storage project, with 3.4 to 4 million tonnes of planned to be stored each year. Inclusion of the carbon capture project was required by Australian environmental regulators. However, in December 2017 it was announced that technical problems mean that will not be stored until late 2018 or early 2019, two years after the plant began operation. This will result in 5.5-7.8 million tonnes of being released. Carbon dioxide injection started in August 2019, with full injection rates anticipated by first quarter 2020.
According to the 2009 Environment Impact Statement, LNG and condensate, initially stored in onshore tanks, was to be offloaded from a jetty onto LNG carriers and oil tankers, for delivery to overseas customers. Natural gas for domestic use will be transported by a 70 km subsea pipeline to the mainland, for transmission to local customers.
On the total investment of the Gorgon LNG project, media articles have reported analyst forecasts of estimated costs ranging from A$11 billion, A$16 billion, and A$50bn in March 2009 to A$43bn in Sept 2009 and A$53 in 2015.

Economic Benefits

Economic modelling carried out in 2008 as part of the environmental impact assessment process, forecast the following macroeconomic impacts :

LNG export agreements

LNG sales agreements were reached between the joint venturers and customers in China, India, Japan and South Korea.
Chevron Australia has executed Sale and Purchase Agreements with Osaka Gas, Tokyo Gas, Chubu Electric Power, now JERA, GS Caltex of South Korea, Nippon Oil Corporation, now JXTG and Kyushu Electric. Chevron Australia also had a Heads of Agreement with Korea Gas Corporation , however it is reported that this was not completed;
Shell has entered into long-term LNG sale and purchase agreements with PetroChina International Company Limited and BP Singapore Pte. Limited and also has secured capacity at LNG receiving terminals including the terminals at Energia Costa Azul LNG in Baja California, Mexico and Hazira in Gujarat, India.
An Australian subsidiary of ExxonMobil has signed long-term sales and purchase agreements with Petronet LNG Limited of India and PetroChina International Company Limited for the supply of LNG from the Gorgon Project. The agreement with Petronet LNG is for the supply of approximately 1.5 Mtpa of LNG over a 20-year term while the agreement with PetroChina is for the supply of approximately 2.25 Mtpa over a 20-year term. Together, these two sales and purchase agreements commit the ExxonMobil subsidiary's share of LNG from the 15 Mtpa Gorgon LNG Project.

Domestic gas

Under the provisions of the Barrow Island Act, the joint venturers are required to reserve 2000 petajoules of gas for delivery into the domestic market. The Gorgon Joint Venture announced plans to establish a domestic gas project, including plans for progressive expansion to enable delivery of 300 terajoules of gas per day into the domestic transmission system. Chevron have indicated that deliveries of Gorgon domestic gas will commence around the time of start-up of the third LNG train.

Criticisms

The proposed project attracted criticism from conservation groups in relation to the potential impact upon Barrow Island's ecology. The island is a Class A nature reserve, and home to the flatback turtle and numerous other animals not found on the Australian mainland. Other concerns are related to the adequacy of quarantine procedures on Barrow Island to protect against introduced species, and risks associated with geological sequestration of CO2. It was reported in November 2011 that native animals on Barrow Island had been accidentally killed daily with a known total of 1550 since construction began