SYDNEY (AFP) – Energy giants Chevron, Shell and ExxonMobil on Monday agreed to develop Australia's massive Gorgon field, giving the final go-ahead to a liquefied natural gas (LNG) project worth hundreds of billions of dollars.
Chevron said the joint venture partners would start work immediately on the plant, pumping 43 billion Australian dollars (37 billion US) into the initial construction phase.
Prime Minister Kevin Rudd said the project off Australia's northwest, which is expected to begin production in 2014, would provide a valuable source of jobs and exports.
"The Gorgon investment will be Australia's largest-ever resources development and is expected to generate 300 billion Australian dollars (US $257 billion) in Australian export earnings," he said in a statement.
The project is already underpinned by supply contracts with China, Japan, India and South Korea worth a combined 145 billion Australian dollars, including ExxonMobil's record 50 billion dollar deal with PetroChina.
"Gorgon will supply cleaner burning natural gas for the growing Asia-Pacific and Australian markets, create thousands of jobs, and generate substantial revenue for Australia," senior Chevron executive Jim Blackwell said.
Gorgon, the world's largest LNG plant, will be built on Barrow Island, a nature reserve about 70 kilometres (44 miles) off Western Australia.
The Australian government approved the project last month after imposing strict environmental conditions.
ExxonMobil said Gorgon had an estimated 40 trillion cubic feet of natural gas, providing an important source of energy for Asia's burgeoning economies.
"With global demand for LNG forecast to triple by 2030, the Gorgon project will be a critical supply source in meeting this future demand, particularly for the economies in the fast-growing Asia-Pacific region," ExxonMobil senior executive Neil Duffin said.
Chevron owns a 50 percent stake in Gorgon and will operate the plant, with ExxonMobil and Shell each holding 25 percent.
Chevron said it was set to award construction contracts worth more than 10 billion dollars in coming months as building work gets underway.
Rudd predicted immense economic benefits for Australia, with the project set to boost government revenues by 40 billion dollars over the next 30 years, generating 10,000 construction and 3,500 permanent jobs.
"Gorgon will help to stimulate Australia's economic growth and provide energy security for many decades," he said.
Macquarie economist Hayden Atkins said the mammoth project had positive growth implications for the entire economy.
"This provides upside to both near and medium-term growth projections," he told Dow Jones Newswires.
Rudd also praised Gorgon's environmental credentials, saying plans to pump excess emissions into rock two kilometres beneath Barrow Island would make it the world's biggest carbon dioxide geological storage project.
He said economies that used LNG rather than coal to generate energy also significantly reduced their greenhouse gas emissions.
Gorgon is just one of a clutch of LNG projects planned in Western Australia and Queensland over the next decade that analysts say will see Australia challenge Qatar as the world's major gas exporter.
Australia exported 15.2 million tonnes of LNG worth 5.2 billion dollars in 2006, a figure the government estimates will quadruple to 60 million tonnes by 2015 if all planned projects proceed.
The gas is liquefied for shipping abroad, where it is turned back into gas and distributed via a pipeline.