I'm willing to bet that you can recite a litany of
projects that have captured the attention of the energy world
over the past several years. Included would surely be U.S.
shale gas, the tar sands of Canada, and deepwater drilling in
Brazil's Santos Basin.
This week, energy folks are focused on what stands to be a
huge
natural gas projectoff the coast of northwest Australia.
The Gorgon liquefied natural gas field will be developed by
Chevron (NYSE: CVX),
ExxonMobil (NYSE: XOM), and
Royal Dutch Shell (NYSE: RDS-A). Chevron has
a 50% stake in the project, while the other two companies
each have one-fourth.
On Monday, Chevron, as the project operator, announced
that the companies had agreed to ante up AU$43 billion ($37
billion) for the first phase of the project. It will involve
the construction of a plant on Barrow Island. Work will begin
immediately, such that production can come on stream in
2014.
The certainty that the project would go forward increased
substantially in August when
PetroChina (NYSE: PTR)
said it would purchase2.25 million tons of liquefied
natural gas annually from the field. That deal followed
another agreement to sell LNG to India. And last week, other
deals to sell gas from the project to South Korea and Japan
were cut. As such, Gorgon will be a boon to Asian gas needs
for decades to come.
Australian Trade Minister Simon Crean pegs the increase in
Australia's gross domestic product from Gorgon at AU$65
billion and predicts that it will add about AU$40 billion in
revenue flow to the government during the next 30 years. It
also is expected to employ about 10,000 workers during the
construction phase.
But the project is not without its drawbacks. Part of the
negative fallout will involve sopping up resources -- human
and otherwise -- from other planned natural gas projects on
the continent. For instance,
Inpex Holding of Japan and France's
Total (NYSE: TOT) are attempting to begin a
joint venture, the resources for which could be in short
supply. And
ConocoPhillips (NYSE: COP) is attempting to
get a project going with its Australian partner
Origin Energy . That pair also hopes to begin
delivering gas in 2014, although at this point their customer
list is blank.
My suggestion to Fools is to watch this fascinating
natural gas explosion develop in Australia. And with its
overall position and leadership of Gorgon, I'd keep an
especially close
eye on Chevron.
Chevron has been granted four stars (out of a possible
five) by
Motley Fool CAPSplayers. Why not add your thumbs up or
down
to that
ranking?
This article was originally published as
This Gorgon Is a Natural Gas Monsteron
Fool.com
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