Gurdip Singh, Contributing Editor
The front-end engineering and design (FEED) work on the multi-billion-dollar Gorgon project has been substantially completed at a cost of A$500 million ($428 million). And spending continues at about A$750,000 ($641,930) a day, according to Chevron Australia Pty. Ltd.
The cost of bringing the project to fruition is estimated at A$16 billion ($13.7 billion).
The Gorgon field lies off the northwest coast of Western Australia.
In addition to the actual cost of the project, Chevron and partners, ExxonMobil and Shell, have invested about A$100 million ($85.6 million) in researching, evaluating, and developing a means of injecting the carbon dioxide (CO2) that will be produced as Greater Gorgon’s estimated 40 tcf of gas is developed.
Environmental responsibility
Last November, the Australian government made an A$60-million ($51.35-million) offer to support the efforts of the Gorgon joint venturers to reduce greenhouse gas emissions for the proposed Gorgon project. The offer was part of the Australian government’s A$500-million ($428-million) Low Emissions Technology Demonstration Fund, which was designed to cover the risk and capital costs associated with demonstrating commercially viable low-emissions technologies and ensuring their viability in the longer term.
The Chevron-led joint venture also is carrying out optimization and evaluation work to ensure the 10 million metric tons per annum (mtpa) LNG project is internationally competitive.
A final investment decision (FID) will be made once the environmental approval process for the LNG and domestic gas facility on Barrow Island is complete. The FID will be based on the defined value of the project, optimization studies, and associated FEED work.
Horizontal directional drilling
A pilot drilling project on the west coast of Barrow Island has provided the Gorgon project with valuable data for reducing environmental impact on the island. The drilling project will help to optimize the design of the underground shore crossing of gas pipelines, which will feed gas to the proposed LNG plant.
A horizontal directional drilling (HDD) rig was used to drill a 6.5-in. (16.5-cm) wide, 480-m (1,575-ft) long hole under the shoreline to an exit point on the seabed at a depth of 12 m (39 ft).
It is the first time an HDD rig has been used on the island, Chevron says, and the data gathered has provided the Gorgon project with detailed insight into the geological properties of the proposed underground shore-crossing location.
In addition to generating useful data, the drilling exercise has provided the Gorgon project with some practical insights on reducing environmental impacts through planning.
Perth-based drilling contractor Underground Services Australia worked closely with Gorgon project operator Chevron Australia and the Gorgon Upstream joint venture to minimize the impact of the project.
Rob Tindall, project manager for Underground Services Australia, says careful planning resulted in a reduction of land clearance of 50%.
“This helped us to develop a compact working site and even retain vegetation within the work area that was originally going to be cleared,” Tindall says.
Three weeks were spent preparing the access to the drilling site, with an emphasis on providing safe access to the beach for the project team and the wildlife that use the area.
Project scope
The JV participants are committed to the project and will continue working with the state and federal governments to ensure the project proceeds in an environmentally responsible way, says Colin Beckett, Chevron’s general manager for Greater Gorgon Area.
Greenhouse gas emissions from Gorgon have been reduced by 70% since 1988, Beckett says, making the project one of the most greenhouse gas efficient LNG proposals in the world.
Project design improvements were part of the answer. The other part is the proposal to inject CO2 removed from the natural gas into underground rock formations beneath Barrow Island.
Carbon dioxide is removed routinely from natural gas during processing and traditionally is vented to the atmosphere. The Gorgon JV proposes that rather than vent the CO2, it could be safely and permanently injected into a geological structure approximately 2,500 m (8,202 ft) underground.
Chevron, together with partners ExxonMobil and Shell, will develop their project on a 300-hectare (741-acre) area, which equates to 1.3% of Barrow Island. The project has been deliberately sited to avoid areas of particular conservation significance.
The work program for the project covers three years. Requirements include geotechnical studies, approximately 110 mi (180 km) of 2D seismic data reprocessing, 650 sq mi (1,700 sq km) of 3D seismic survey acquisition, and the drilling of an exploration well in the additional acreage in W06-12.
Seismic work is scheduled to begin in 2007.
