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Gorgon gets go-ahead - again -

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Gorgon gets go-ahead - again

David Weber reported this story on Monday, September 14, 2009 12:30:00

ELEANOR HALL: Let's go now to Perth, where Australia's largest ever resources project, worth
hundreds of billions of dollars is now officially going ahead.

Chevron, ExxonMobil and Shell received the necessary government approvals and have now made the
final investment decision for the Gorgon Gas project. Construction of the 40-year project will
begin later this year and will generate 10,000 jobs at its peak.

David Weber is at the official approval meeting and joins us now.

So David the Federal Government approved this deal several weeks ago. Why has it taken until now
for this deal to be confirmed?

DAVID WEBER: Well, Eleanor I guess it is a bit of a surprise that it did take this long. We were
told that the final investment decision would be coming at some stage towards the end of the year
and some might wonder why it wasn't made immediately after Peter Garrett's final environmental
approval.

But I believe that Shell only made their final investment decision as part of the joint venture
over the weekend and so here we are today with what is a project that has been described as
Australia's biggest ever resource project - the biggest of its kind in the world. Really, about as
big as it gets. I mean they are talking about $50 billion, maybe a bit less than that for
construction yet they have already signed $150 billion worth of contracts.

ELEANOR HALL: Now environmentalists have opposed putting the processing plant on Barrow Island.
What have the companies had to say about that?

DAVID WEBER: It seems very unlikely that they are going to move to the mainland now because the
approvals have all been tied up with the prospect of the processing plant being on Barrow Island
which has been, they have had an oil production facility there, Chevron has for several decades.

It was a Class A nature reserve since 1910 and there have been some fairly strict environmental
conditions imposed on the project but today they have all been talking about the geosequestration,
which is the injection of CO2 into used reservoirs underground and they are saying that the
environmental benefits of that and indeed the rest of the world is watching this project to see how
it goes on that front.

They are saying that really in terms of the future, this is an environmental bonus for the entire
world, not just Australia.

ELEANOR HALL: And how important will this project be for the economy once it is up and running
particularly for Western Australia?

DAVID WEBER: Well, they are talking about 10,000 jobs when the project is being, during the
construction phase. Something like 3,000 jobs ongoing.

Now the royalties, the taxes that will flow from that, Western Australia has done a deal with the
Federal Government where some of that money will go into supporting the establishment of bigger
communities in the Pilbara region, to support the resources, to support the resource projects up
there for the entire country.

So that is good for Western Australia and an area that needs quite a bit of infrastructure. Really
it has been lacking up there over a period of time but the amount of money that they are talking
about, it really is phenomenal.

A 40-year project, Chevron today said that the amount of energy that would be able to be provided
by the gas coming from the Gorgon gas field would be enough to power a city the size of Adelaide
for eight centuries starting today and I should also point out that Chevron said that work will
start today because they have started to order some of the stuff that they need and construction
perhaps in full swing by early next year.

ELEANOR HALL: So is there much opposition to the project there locally?

DAVID WEBER: Not really. I think that Western Australia has gone through a period of economic
downturn as elsewhere in the world. There was the boom and they are talking now about perhaps this
is going to start the next boom for Western Australia but I guess one of the problems that has been
raised is the lack of skilled workers to be able to work on this project. I guess we are looking at
the potential for a lot of these workers to come from overseas because the lack of skilled labour
was seen to have been something that hampered Western Australia's boom as big as it was, it could
have been bigger if there were people here that had the necessary skills to undertake the work.

ELEANOR HALL: David Weber in Perth, thank you.