Western Australia Breaks Ground for $39.4B Gorgon Project

WA Premier Colin Barnett has marked the formal start of works on Chevron's A$43 billion (US $39.39 billion) Gorgon project with a ceremonial groundbreaking on Barrow Island.

The groundbreaking marks the start of construction of a three-train, 15 million metric ton per year LNG facility that will create about 10,000 jobs during the peak construction phase with more than 3,500 direct and indirect jobs sustained throughout the life of the project.

With total gas resources of 40 trillion cubic feet, Gorgon will be the biggest resources project in Australia's history and make a significant contribution towards Western Australia's prosperity in the next 30 years.

Barnett said benefits from the project were already flowing to locally-based construction and manufacturing companies. Businesses including Howard Porter, Mermaid Marine, Ertech and Laing O'Rourke were among those awarded contracts.

"Today marks the formal start of work on the biggest resource project ever seen in Australia," he said.

"The scale of the project is big, but it's the flow-on benefits to WA companies and the creation of jobs as a result that provide tangible benefits to local people and their families.

"Hundreds of millions of dollars will be spent on ongoing, long-term maintenance and service contracts

"The State Government has a local content policy in place and has been working with the Chamber of Commerce and Industry through the Industry Capability Network to ensure local businesses are involved and will benefit from the Gorgon project."

While the majority of revenues from the project will flow to the Commonwealth, the Premier welcomed the Federal Government's pledge to spend 25 percent of expected Petroleum Resource Rent Tax from the project, worth up to $100 million a year, on WA infrastructure projects.

The first LNG from Gorgon is due in 2014 and domestic gas is planned by the end of 2015.

The Gorgon Joint Venture participants have entered into long term LNG sales and purchase agreements with customers in Japan, China, India, South Korea and North America.