A Chevron Texaco spokesman told EnergyReview.net this morning there was no change to that original agreement, and subject to market conditions the onshore pipeline was still part of the plan
The partners said this week as part of their framework agreement to unitise their interests to include the Greater Gorgon fields the planned development was based around two production trains with an annual production rate of 10 million tonnes of LNG per year.
They said material and labour costs had forced the project to contemplate the full scale, two-train development in order to become more competitive.
While the final investment decision (FID) is still planned for mid-2006 but first gas was now realistically expected in 2009 or 2010.
As part of the original deal with the State Government, the partners were allowed to build one train on the Class A reserve before being obliged to make gas available to the domestic market.
If the project expanded beyond that stage, the partners were obliged to build a pipeline to the coast so the state’s domestic gas market would at least benefit from the development of the project.
The spokesman said the commitment to the government was that the partners submit proposals by the end of 2010 for the establishment of a domestic gas market by the end of 2004.
WA’s Department of Industry and Resources was not able to officially confirm the expectation of an onshore trunkline still stood, but privately staff said a pipeline was still part of the State’s expectations from the partners.
“With any royalties going to the Federal Government, an increased domestic gas supply is the only economic benefit the WA community will get,” said one source.
The flow-on economic benefits to WA from the project have long been a sticking point with the short-term construction phase tipped to create the largest local economic injection.
The bulk of the specialist cryogenic capital equipment is tipped to be sourced from overseas, the royalty stream will flow to the federal government, leaving the labour component, payroll taxes and a greater gas supply as the main economic fillips for the state economy.
The project is still seeking environmental and government approvals.
Interests are ChevronTexaco 50% (operator), ExxonMobil 25% and Shell Australia 25%.
