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Wednesday, 16 March 2016
Page: 2099


Senator BACK (Western Australia) (13:37): Before starting, I want to acknowledge and welcome the grandmothers in purple who are with us in the gallery today.

On Monday of this week I was privileged, along with the Minister for Energy and Resources, the Hon. Josh Frydenberg, past ministers Ian Macfarlane and Gary Gray and the member for Durack, Melissa Price, to travel with Chevron to Barrow Island to celebrate a milestone in the Gorgon project: the fact that, by tomorrow or Friday, the first-ever shipment of LNG—liquid natural gas—will leave Barrow Island for clients in Japan.

The project—principally Chevron, minor partners Shell, ExxonMobil and some Japanese electric companies—is a US$55 billion project which is the biggest resources ever project in Australia's history and the largest private sector investment in resources in the world today. Let me put that into perspective: in today's dollars the Snowy Mountains Scheme would be worth about A$8 billion. The Gorgon project on Barrow Island, together with its neighbour, Wheatstone—also a Chevron project, down the road in Exmouth—is worth just under US$100 billion. The first of three trains has now been completed and the Asian Enterprise, a new Chevron ship—one of four already built, with two more to come—was alongside. We visited the ship and celebrated with the executives and the staff of Chevron and their associates what is an absolute milestone.

It is an example of environmental responsibility. Barrow Island is an A class reserve which, for many years, was under the environmental responsibility and direction of Harry Butler—an amazing person who died only recently. This is a project that occupies only 1.5 per cent of the land mass of Barrow Island. They have been producing oil on Barrow Island for some 50 years, and the level of environmental responsibility certainly makes it an island that would be well ahead of any others around the Australian coastline, particularly in the absence of vermin. But it does prove that, alongside responsible environmental management, we can also have a massive oil and gas project.

Let me tell you a little bit about the project in terms of its contribution to Australia and Western Australia: 95 per cent of the 19,000 employees who have worked on the Gorgon project are Australian. There are 5½ thousand still on the island today completing trains 2 and 3, which should be available and operating within about 12 months, and within 12 months the first of the three Wheatstone projects will come on stream. To give you some indication of the scale of this operation, by the time the three Gorgon trains are operating, a ship will leave Barrow Island every 36 hours for the next 40 years—at least 40 years—to supply liquid natural gas to our clients in Asia and elsewhere. And as we all know, the greatest hope for a reduction of carbon pollution around the world is to use LNG to replace other higher carbon-producing sources of energy and electricity. Almost 1,000 contracts are being let to Australian companies. In excess of $25 billion has gone to Australian companies as a result. About $1.6 billion has been spent on exploration within Australia between 2009 and now.

I do want to reflect also on the contribution of the Chevron project, the Wheatstone project and others in the LNG space to the Australian economy. It is predicted that more than $1 trillion will be added to the GDP of Australia, which is about $32 billion per year over the life of this project. We know that about 150,000 full-time equivalent jobs in Australia are being, have been, or will be created. The contribution to the Australian government federal revenue alone from Gorgon-Wheatstone will be in the order of $340 billion—and remember that this is a private sector project without a dollar of government investment. We know that it will add some $320 billion to the real incomes of Australians—around $10 billion a year—with the added value of income tax that will go into the system.

It is not known around the world but, by 2018-19, with the North West Shelf projects, the Ichthys project in Darwin and the existing ConocoPhillips project, with Gorgon and Wheatstone and with the Queensland LNG projects underway, Australia will surpass Qatar as the largest exporter of LNG in the world—an absolutely remarkable performance.

I particularly want to give credit to the inspirational leadership of the managing director of Chevron here in Western Australia, Mr Roy Krzywosinski, whose knowledge of the project was so much in evidence on Gorgon on Monday. No matter what question was asked of his executives or of the operational team, Krzywosinski is so well across Gorgon that he was able to give us detailed information—for example, that $160 million cubic metres of LNG will be going out on the vessel on Thursday or Friday; the capacity over time; the amount of investment. This is world's best practice. This is new, it is the best and it is Australian.

I did not mention in the representation about our capacity into the future. The Shell Prelude project that the Shell company is currently building, having constructed in South Korea the largest floating structure ever built, will be a floating LNG operation offshore of Western Australia—contributing, again, to Australia's LNG capacity. Returning to Krzywosinski, despite the regrettable criticism that has been levelled at him by Western Australian Labor colleagues in this place, he has, with his executive team—his managers, his supervisors and the very caring personnel on Gorgon—led a remarkable occupational safety health and welfare record.

It was interesting to me to look at the quality of the cyclone-proof facilities—the mess, the catering and the gymnasium, which is about the most used structure. To give you an example of the seriousness with which people take their lives and their roles, we were told that they are entitled to four cans of midstrength beer per day, and the average consumption is one. People's attention to their physical fitness, to their ongoing training and to their skills development was very much in evidence.

It is important for the Australian community to have an understanding of the scale and the importance of projects such as this one. A feature of the LNG project on Gorgon is the carbon capture and storage program which will, when it is operating, put about 3.2 million tonnes of carbon safely under the ground to a significant depth—the largest carbon capture and storage project anywhere in the world. I should add for my Western Australian constituents that the Gorgon project is committed to supplying a significant amount of domestic gas and the vastly sized dom gas pipes and tanks are already in place, which we saw again as we journeyed out onto the jetty.

What I want to reflect on in the few minutes left available to me is the environmental responsibility that sits beside Gorgon. For example, I purchased almonds and mixed nuts to bring over to Canberra with me for the week. On entering Gorgon, they were taken off me although they were never going to leave my briefcase. Your shoes are checked and your pockets are emptied. Any vehicle going onto Gorgon from Dampier is sterilised. These are huge trucks. They are sterilised and shrink-wrapped in plastic and they are conveyed onto the island.

I think it stands as an example to anyone who is critical of the capacity of resource projects like this one to not only exist beside environmentally sensitive areas such as Barrow Island but to enhance them. I conclude by congratulating Chevron on their partners and saying what a great project this is for the future of Australia. (Time expired)