Barrow Island - Gorgon Project

The Gorgon Joint Venture (GJV) comprises the Australian subsidiaries of Chevron (operator), ExxonMobil and Shell. The GJV is proposing to develop the Greater Gorgon gas fields, located approximately 130km off the north-west coast of Western Australia. The Greater Gorgon gas fields contain some 40 trillion cubic feet (Tcf) of gas, the nation's largest undeveloped gas resource.

The development proposal includes:

• A gas processing facility on Barrow Island consisting of three 5 million tonne per annum (mtpa) LNG trains and carbon dioxide injection facilities
• Subsea development of the Gorgon and Jansz gas fields involving subsea pipelines from the fields to Barrow Island
• LNG shipping facilities to transport products to international markets
• A domestic gas plant and pipeline to deliver gas to the mainland

Barrow Island is home to Australia’s largest operating onshore oilfield and is also a Class ‘A’ Nature Reserve.

The Barrow Island Act 2003 and the Gorgon Gas Processing and Infrastructure Project Agreement (the State Agreement) outline the terms and conditions of the Gorgon Project, including access to the island, supply of domestic gas to the mainland, provision of net conservation benefits, geosequestration of  CO2 and local content obligations.

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Economic modelling completed by the GJV for an original 10 Mtpa development indicates that potential benefits of the project include:

Potential benefits of the project include:

• An estimated AU$11 billion capital investment
• More than 6,000 jobs would be created on an ongoing basis in associated industries right across Australia, with 1700 jobs based in Western Australia
• Over $17 million in royalties and taxes paid to government
• Increased export opportunities
• Strengthening links with the international oil and gas community
• Formation of research alliances and global opportunities for Western Australian companies
• Skills and knowledge transfer with benchmarks established in subsea technology development and geosequestration

The GJV expects to complete new economic modelling for the 3 x 5Mtpa development concept in 2008.

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The Gorgon Joint Venturers (GJV) (Chevron 50 per cent, Shell 25 per cent, and ExxonMobil 25 per cent) received State and Federal government environmental approvals in September and October 2007, respectively, for a 10 Mtpa LNG development on Barrow Island. Although an oilfield has operated there since 1967, Barrow Island is an A-class nature reserve and the environmental approvals have therefore imposed stringent conditions on the project.  These include quarantine management, turtle protection, dredging management, and the requirement to construct a CO2 injection system to dispose of reservoir CO2 during operations. 

In December 2007, the GJV announced their intention to upgrade the project specifications to increase production from the project to 15 Mtpa in order to improve project economics and address mounting industry cost pressures.  The GJV expect the upgrade from two trains to three (5 Mt/a per train) will have minimal additional environmental impact to that of the already-approved two-train 10 Mtpa project. In mid March 2008, the Western Australian Environmental Protection Authority announced a Public Environmental Review level of environmental assessment for the proposed changes to the original proposal.

Once the GJV has obtained environmental approvals for the additional train and completed front-end engineering and design work for the project, it will consider a final investment decision on the project.

Approvals are required under the Barrow Island Act 2003 and its Schedule 1 before the project can proceed. This legislation limits the impact of gas processing developments (including Gorgon) on Barrow Island to an area of 300 hectares of uncleared land, about 1.3% of the island.

Documentation relating to the environmental impact assessment and approval of the GJV’s original proposal for a 10Mtpa LNG development can be obtained through the Gorgon Joint Venture’s website (www.gorgon.com.au) and  Environmental Protection Authority (State) and the Department of the Environment, Water, Heritage and the Arts (Commonwealth) websites.

For project development information please refer to the Gorgon LNG Development (www.gorgon.com.au).

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In 2001, ChevronTexaco put forward a plan to the Government of Western Australia to develop the large Gorgon gas reserves, including the possible use of a limited area of the Barrow Island A Class nature reserve.

Due to the size and potential economic value of the Gorgon gasfields, the high conservation values (including biodiversity) of Barrow Island, and the social importance of these economic and conservation values, the Government of Western Australia determined that a high level evaluation of the Gorgon Gas proposal was required to allow it to make an informed decision on whether to reject or provide in principle approval for the use of Barrow Island for a gas processing complex as part of the initial development of the Gorgon gas project.

As there was no formal process in Western Australia to assess the relationship between the environmental, social and economic costs and benefits of significant development proposals, Government sought advice on environmental matters from the Environmental Protection Authority (EPA) and social, economic and strategic aspects of the plan from the Department of Industry and Resources (DoIR). Advice was also sought from the Conservation Commission of WA, with whom the Barrow Island Nature Reserve is vested.  The Gorgon Joint Venture produced an Environmental Social and Economic (ESE) Review for its development proposal.

The WA Government released an overview and information pack for a six week public review period inn July 2003 (available in the right hand panel).  This document provided the community with access to the key pieces of environmental, social, economic and strategic advice which Government used to make its in principle decision on the use of Barrow Island for gas development.   The outcome of this review by Government was the passing of the Barrow Island Act 2003 (WA) legislation in November 2003 through the Western Australian Parliament.  This was a significant milestone for the Gorgon LNG Development, as it provided in principal approval for the use of Barrow Island for the $11billion development of the Gorgon gas field.  This decision by Government, however, did not replace any requirements for formal environmental assessment under the Environmental Protection Act 1986 (WA) and the Commonwealth Environment Protection and Biodiversity Conservation Act 1999.

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Information on the Gorgon Joint Venturers' (GJV) CO2 geosequestration proposal and the statutory approval process is available in the attached pdf document below. In addition, information on the project is available through the GJV’s website.

The Western Australian Government, through the Department of Industry and Resources, engaged independent consultants to appraise the feasibility of the GJV’s proposal to sequester reservoir CO2 on Barrow Island.

To date, Phase I, II and III have been completed, and information on this appraisal is also included in the pdf document below. According to the results of the Phase III due diligence appraisal, the GJV has demonstrated that many of the major requirements for CO2 storage are satisfied and based on information available to the due diligence team at the time of the Phase III review there appear to be no significant issues which may compromise the feasibility of the project.  Information on this appraisal is also included in the pdf document below and a pdf of the executive summary of the Phase III report is also attached.

May 2008 Gorgon CO2 Geosequestration Project (PDF 124 Kb, opens in a new window)

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