WA utilities in Gorgon gas supply deal

30 Nov 2011, 3:03 pm   -   Source: AAP
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Chevron, ExxonMobil and Shell have agreed to sell some gas from the Gorgon LNG project in Western Australia to the state's energy utilities.

Western Australia's gas security has been bolstered with the signing of two supply contracts with Chevron's $US43 billion ($A43 billion) Gorgon liquefied natural gas (LNG) project.

WA power station operator Verve Energy and energy retailer Synergy signed agreements late on Tuesday with Chevron and Gorgon joint venture members ExxonMobil and Shell for a combined 125 terajoules per day, for 20 years commencing in 2015.

The new supply will coincide with the expiration of Verve's and Synergy's existing gas supply arrangements around 2015/16, WA Energy Minister Peter Collier said in a statement on Wednesday.

"The reaching of these agreements provides long term and reliable domestic energy supply, which will enable us to maintain a strong and vibrant economy in conjunction with an additional stream of energy security," Mr Collier said.

He said the contracts provided a foundation for expected growth in Verve's and Synergy's gas portfolios.

While first LNG is expected from Gorgon in 2014, the joint venture does not need to start supplying gas to local users until the following year under WA's 15 per cent domestic gas reservation policy.

Chevron on Thursday will hold an official ground-breaking ceremony at its other major LNG project in WA, the $US29 billion Wheatstone joint venture with Apache Energy, Shell and Kuwait's KUFPEC.

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