Chevron seeks drilling clearance to replenish supplies from nation’s biggest LNG development
US giant Chevron wants to drill seven new gas wells to replenish supplies at its Gorgon facility, the nation’s largest.
US giant Chevron has sought approval to drill seven new gas wells to replenish supplies at its Gorgon facility, Australia’s largest LNG development – an application that will test the appetite of local officials for gas.
The application comes amid frustration in Australia’s gas industry about delays in securing approvals for new developments.
Australia’s offshore resource regulator, the National Offshore Petroleum Safety and Environmental Management Authority, has already determined the offshore project proposal meets the regulatory requirements for it to be opened for public comment but has not yet considered the acceptability of the project and associated environmental impacts.
Chevron has said it will stagger drilling and expects to begin in 2026. The seven backfill fields sought by Chevron are located about 200km north of Onslow and 100km north-northeast of Barrow Island.
To begin, Chevron must secure approvals, and environmental permits have recently emerged as the biggest impediment.
Woodside is struggling to secure approvals for its proposed $30bn-plus Browse LNG project in Western Australian. The Australian last week reported that the project was on course to be rejected by the WA Environmental Protection Agency after it preliminarily determined that the development posed an unacceptable risk.
The ruling could yet be overturned, but it sets the scene for a major test for governments, which are struggling to address energy security concerns amid rising environmental opposition.
Woodside chief executive Meg O’Neill said the development should be approved as it was “critical” for Australia and the broader region.
The EPA recommendation, which will be concluded next year, could be overruled by the federal government.
WA-based federal Resources Minister Madeleine King is a strong supporter of gas, but Environment Minister Tanya Plibersek has shown she will not endanger native wildlife in favour of fossil fuel projects.
In a bid to win favour, Woodside and other gas developers have sought to frame the debate around Australian energy security. The country’s eastern seaboard is expected to face gas shortages as soon as 2026, with an economically damaging shortfall expected from 2027.
Because Browse is a WA project, any benefit for Australia’s eastern seaboard is only likely through LNG imports. Woodside could provide shipments during peak winter and summer periods when demand for gas grows.
The majority of Browse’s supplies would, however, be destined for Asia – which is increasingly reliant on Australia. Asia, one of the world’s largest coal users, is likely to rely on LNG for decades to come as it has insufficient renewable resources.
That demand is a key reason why Woodside is seeking to grow rapidly, but its expansion plans have put it in the crosshairs of environmentalists.
Environmentalists insist Woodside’s LNG expansion is slowing global efforts to move to renewables, a claim rejected by the WA-based energy company.
Woodside has pledged to also grow its so-called future energy business by spending $5bn. The first major investment came last Monday when it announced it could acquire a low-carbon ammonia production facility in Texas from US company OCI Global in a deal worth $US2.35bn ($3.65bn).
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