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Gorgon liquefied natural gas project, Australia

15th March 2013

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

  

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Name and Location
Gorgon liquefied natural gas (LNG) project, Barrow Island, Australia.

Client
Chevron Australia (47.33%), ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).

Project Description
The project plans to develop the Greater Gorgon gasfields, between 130 km and 200 km off the north-west coast of Western Australia. The gasfields contain resources of about 40-trillion cubic feet of gas (the equivalent of about 6.7-billion barrels of oil) and are Australia’s largest known gas resource.

The project has an economic life of at least 40 years.

The LNG project includes the development of the Greater Gorgon gasfields, involving subsea pipelines to Barrow Island; a gas processing facility on Barrow Island, comprising three 15-million-ton-a-year LNG trains and a domestic gas plant; LNG shipping facilities to transport products to international markets; and greenhouse-gas emissions management through the injection of carbon dioxide into deep formations beneath Barrow Island.

Value
The project is estimated to cost $37-billion for the first phase of development, although a cost blowout is anticipated, as a $9-billion price hike brings the total estimated value of the project to $52-billion.

Duration
The official ground-breaking ceremony was held in December 2009.
The project is expected to start in late 2014, with first LNG cargo expected in the first quarter of 2015.

Latest Developments
Theiss, which is working on a range of contracts at the Gorgon project, has been awarded a A$212-million contract from Chevron to provide miscellaneous civil work at the project.

The works covered under the new contract include earthworks, underground services, concrete works and temporary building works.

Meanwhile, project house Leighton has reported that its contract to deliver civils and underground works packages for the Gorgon project has increased by $975-million to an estimated value of $1.78-billion.

The new estimated value reflects an increased and amended scope of work to provide better flexibility to deliver the package in a more efficient and timely manner.

Key Contracts and Suppliers
Kellogg Joint Venture (JV) Group, comprising Clough, JGC Corporation and Hatch & Associates (front-end engineering, design and engineering, procurement and construction management contract); Hyundai Heavy Industries (modules and three preassembled units); Howard Porter (trailers); Toll Group (supply base and logistics services); Thiess, Decmil Australia and Kentz JV (construction village); Ertech (marine and onshore work, road improvements, earthworks, water facilities and telecommunications tower installations); Thiess (site preparation for the LNG plant, expansion of logistics infrastructure and temporary construction facilities); DB Schenker (integrated logistics services, including sea chartering services, air transport of freight and consolidation of materials and equipment); Agility Project Logistics (supply base operations and transportation services); Cobham Aviation Services Australia (operation of jets and aircraft); Bristow Helicopters Australia (helicopters); Osmoflo (reverse-osmosis (RO) desalination plants); Sinclair Knight Merz (SKM) (monitoring marine environment); Health Services Australia (medical services); BJ Services (precommissioning services); Aker Solutions (subsea umbilicals and associated equipment); Offshore Oil Engineering Company (fabrication of pipe-rack modules); McDermott International (preassembled racks and units, as well as the fabrication of subsea structures and spools); Air Products (cryogenic heat exchangers); MTU Detroit Diesel (standby power); Monadelphous (water treatment facility); China Offshore Oil Engineering Corporation; Monadelphous through KT Pipelines Services (transmission pipelines); Neptune Marine Services (dive and vessel support services); AGR Drilling Services, contracted by Van Oord Australia (excavation services on the Jansz Scarp); Noskab (power cables); Fairstar Heavy Transport (heavy transport vessels for modules); AJ Lucas (horizontal directional drilling); Boskalis Australia (dredging work and construction of material offloading facility); Westralian Engineering (maintenance, repair and refurbishment work for Boskalis Australia); and Theiss (miscellaneous civil work).

On Budget and on Time?
In December last year, energy major Chevron warned of a A$9-billion cost blowout at the Gorgon LNG site, on Barrow Island, following a cost and schedule review.

Foundation costs increased from A$43-billion to A$52-billion, with Chevron blaming the increase on labour costs and productivity associated with Barrow Island site infrastructure, logistics challenges and weather delays.

Contact Details for Project Information
Agility Project Logistics investor relations, email investor@agilitylogistics.com.
AGR Drilling Services, tel +47 56 31 6000 of fax +47 56 31 6001.
AJ Lucas, tel +61 7 3363 7333 or fax +61 7 3363 7399.
Air Products investor relations manager Ken Walck, tel +1 610 481 8315, fax +1 610 481 2729 or email walckkm@airproducts.com.
Aker Solutions investor relations senior vice-president Lasse Torkildsen, tel +47 67 51 3039 or cell +47 91 13 7194.
Boskalis Australia, tel +61 8 9327 1000 or fax +61 8 9226 0213.
Bristow Group, tel +1 713 267 7600 or fax +1 713 267 7620.
Bristow Helicopters Australia, tel +61 8 9478 3388 or fax +61 8 9478 3844.
Chevron Australia, tel +61 8 9216 4000, fax +61 8 9216 4166 or email gorgon.info@chevron.com; or senior communications adviser Nicole Hodgson, tel +61 8 9216 4485 or email nhodgson@chevron.com.
Clough marketing and communications manager Kristy McGrath, tel +61 8 9281 9344, fax +61 8 9481 6699, cell +61 417 451 724 or email kristy.mcgrath@clough.com.au.
DB Schenker corporate communications, tel +49 201 8781 0, fax +49 201 8781 8334 or email info@dbschenker.com.
Decmil Australia, tel +61 8 9368 8877, fax +61 8 9368 8878 or email enquiries@decmil.com.au.
Ertech, tel +61 8 9302 6666, fax +61 8 9302 6100 or email ertech@ertech.com.au.
Fairstar Heavy Transport, tel +31 10 403 5333, fax +31 10 403 5344 or email fairstar@fairstar.com.
Hatch & Associates, tel +61 8 9410 3306 or fax +61 8 9410 3290.
JGC Corporation, email ir@jgc.co.jp.
HHI, tel +82 746 4775 or +82 746 7415, fax +82 746 4662 or email hhiir@hhi.co.kr.
Howard Porter, tel +61 8 9418 0000 or fax +61 8 9418 5383.
Kentz investor and public relations Elizabeth Rous, tel +44 20 3159 4000 or email elizabeth.rous@kentz.com; or Catríona Nugent, tel +353 52 61 22811 or email catriona.nugent@kentz.com.
KT Pipelines Services, tel +61 8 9250 2161, fax +61 8 9250 1024 or email info@kt.com.au.
McDermott International investor relations and corporate communications director Robby Bellamy, tel +281 870 5165 or email rbellamy@mcdermott.com.
Monadelphous investor relations manager Rachael Cutler, tel +61 8 9315 7429 or cell +61 457 539 985.
Neptune Marine Services, tel +61 8 9424 1111, fax +61 8 9424 1110 or email info@neptunems.com.
Noskab, tel +44 1 22 485 4100 or fax +44 1 22 485 4104.
Osmoflo, tel +61 7 3623 6800.
SKM, tel +61 8 9469 4400, fax +61 8 9469 4488; or Patrick Hill, email pxhill@skm.com.au.
Thiess, tel +61 7 3002 9000, fax +61 7 3002 9009 or email feedback@thiess.com.au.
Toll Group, tel +61 3 9694 2888 or fax +61 3 9694 2880.
Van Oord Australia, tel +61 7 3369 1988, fax +61 7 3368 3904 or email loc.bne@vanoord.com.
Westralian Engineering, tel +61 8 9437 5455, fax +61 8 9437 5477 or email info@weseng.com.au.
Theiss media contact Alex Smith, +61 7 3002 9673 or email asmith1@thiess.com.au.

Edited by Creamer Media Reporter

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