Chevron Corp's proposed Gorgon liquefied natural gas (LNG) project needs to meet more stringent environmental conditions before it can obtain final approval from the Australian government.
The Western Australia environment ministry said in a statement on Wednesday that Chevron needs better protection of the high-value corals adjacent to the project and the flatback turtle population on Barrow Island, a class A nature reserve where Chevron is planning to build its LNG facility.
But the tightened environmental terms are not expected to cause major delays to Chevron and its partners reaching a final investment decision, as Chevron is not required to submit a fresh proposal, said an official from the environment ministry.
With the determination complete, we are now looking forward to timely environmental approvals by the state and federal governments, Chevron said in an emailed statement, adding that it expects to make a final investment decision in the coming months.
The environment ministry will now need agreement on the extra terms with other ministers before final state approval can be granted. The approval of the Federal Environment Minister will also be required, but that is largely considered a formality.
There has been recent media reports Chevron may approve the development of Gorgon by mid-September once it gets all the necessary environmental approvals, while JP Morgan said in a recent report Chevron may sanction the project by late August.
Amongst the new terms are for Chevron to monitor fauna on the island, to minimize noise and artificial light emissions, as well as to have a turtle conservation plan for the lifetime of the project, instead of the previously proposed 30 years.
Given the value of Barrow Island as a habitat for flatback turtles, I strongly endorse this condition with the object of minimizing light emissions, Environment Minister Donna Faragher said in a statement.
This commitment is to enhance the turtle population through such means as establishing hatcheries should the island's turtle numbers show decline.
The ministry was responding to appeals raised against a conditional approval given by the Environmental Protection Agency of Western Australia in April on Chevron's proposal to expand the project to 15 million tons per annum (mtpa), after having received state approval for a 10 mtpa project in 2007.
The project was originally expected to cost A$11 billion, but the Western Australian state government has estimated the scaled-up project to cost A$50 billion ($41 billion).
Chevron holds a 50 percent stake and is the operator of the project, while Royal Dutch Shell Plc and Exxon Mobil Corp each hold 25 percent.