Regional LNG: Australia to satisfy rising LNG demand: Report

Australia is well positioned to satisfy burgeoning demand for natural gas on the west coast of the United States and in Mexico, the operator of the planned $11 billion Gorgon gas project said as reported by Sydney Morning Herald.

ChevronTexaco Australia Pty Ltd's general manager of the Gorgon Area, Paul Oen, said global competition was intense and Australia had a rare window of opportunity to score major new liquefied natural gas (LNG) contracts.

"The competitive environment is critical, Gorgon and Australia must compete with other projects in other countries which are just as determined as we are to be successful," Oen told a Labor business lunch in Perth.

Oen said massive new LNG projects in Indonesia and Russia were jostling with Gorgon to become first in line in the market, with demand tipped to grow in China and the US.

"So even through we have a world class resource, launching the development will still be challenging.

"We're targeting a market window of 2008-2010 when we believe there is an opportunity to launch the Gorgon project."

Australia, and the Gorgon project, were "well positioned to help satisfy that demand in both the west coast of the United States and in Mexico".

Last week, the Western Australian government passed legislation enshrining its support for the proposed Gorgon gas processing plant at Barrow Island off the state's Pilbara coast.

Development of the Gorgon gas field is expected to unlock the Greater Gorgon resource which contains about 40 trillion cubic feet of gas, or 25 per cent of Australia's known gas resources.

Gorgon operator ChevronTexaco, and partners Shell and ExxonMobil said that until 2020, the Gorgon gas development could contribute about $11 billion in investment expenditure.

It could also give Australia more than $17 billion in taxes and royalties over the life of the development.

Last month, the Gorgon venture signed a record $30 billion gas deal with China which would be sufficient to kick off the project.

A final investment decision will be made in mid-2005.

Mr Oen said the Gorgon venture was working on getting markets, engineering and environmental approvals in place.

"Capturing these big market opportunities is a long term effort, we've made solid progress in that area and we've still got a ways to go," he said.(*)