Australian natural gas project to create thousands of jobs
Updated
Its official, Australia's largest resources project has been given the go-ahead.The Gorgon natural gas development is owned by multinationals Chevron, Exxon Mobil and Shell.
Presenter: Karon Snowdon
Speakers: Kim Carr, Industry Minister; Ian Cairns, Australian Steel Institute Chairman; Roy Krzywosinski, Managing Director Chevron; Gordon Ramsay, Senior Energy Analyst, UBS Investment Bank
Australia, China, Japan, South Korea, North Korea
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SNOWDON: It has its environmental critics and now Gorgon faces questions on the jobs front.
Prime Minister Kevin Rudd says export earnings from Australia's largest resources project are expected to be around 300 billion Australian dollars over its 40 year life.
At its peak it should generate 10-thousand direct and indirect jobs.
But it could have meant another three-and a half to four thousand steel industry jobs as well according to the Australian Steel Institute which represents major local steel makers.
The Institute's National Manager Ian Cairns says the Gorgon project manager Chevron recently changed the design from Australian steel standards to Japanese standards.
That locks out local producers from bidding to supply up to 260-thousand tonnes of steel needed to build the platform, gas facilities and rail lines.
CAIRNS: 80% of that will be modules fabricated overseas but the balance or somewhere around 60-thousand tonnes was to be fabricated in Australia.
SNOWDON: And you maintain that this is a late change and contrary to earlier undertakings by Chevron?
CAIRNS: Yes exactly the initial tender documents and designs were all to Australian standards and its only in the last couple of months that that change has been made.
SNOWDON: Well do you believe that Chevron was misleading earlier about its intention to use at least for part of the project Australian standard steel?
CAIRNS: We certainly had talks with Chevron over the past few months and its certainly a shock to us now to learn of their late change to Japanese standards.
SNOWDON: Ian Cairns says he's hoping the Government will support industry calls for Australian made steel to be used in parts of the Gorgon project.
On the same day, the Gorgon project was officially signed, Industry Minister Kim Carr has announced a review of import tariff and other concessions worth a total of 2-billion Australian dollars a year.
He says any company wanting government assistance for projects like Gorgon will have to meet tougher criteria.
CARR: If people want access to tariff concessions they will be obliged to meet the criteria for demonstrating they have provided full fair and reasonable opportunities for Australian business to participate in these projects.
SNOWDON: In this case of the Gorgon gas project Chevron does say in its documentation that it has a policy to provide fair access to Australian companies if there's no cost penalty to the project itself. So there's always a way out for the company isn't there?
CARR: There is however we want to make worth everyone's while to improve the level of efficiency, to get value for money to the projects and to ensure there is full, fair and reasonable opportunities for participation.
SNOWDON: At the signing ceremony in Western Australia, major partner and manager Chevron thanked the government for its support.
Chevron's Managing Director Roy Krzywosinski says construction will begin within months and the joint venture partners will spend 33-billion dollars on Australian goods and services.
KRZYWOSINSKI: In the coming weeks and months we expect to commit upwards of 10 billion dollars in contracts and purchase orders.
SNOWDON: The first gas will flow from 2014 to buyers in China and India as well as traditional customers Japan and South Korea.
UBS senior resources analyst Gordon Ramsay global demand will be driven by growth in the Asia Pacific but its difficult to forecast accurately.
RAMSAY: The future growth in the project will depend on the outlook for countries like China and India and their ability to take larger volumes of LNG over time.
