Australia Approves Gas Sale to China

[eric0224_yu]

Australia gave final approval Wednesday for a natural gas (http://www.lookchem.com/cas-800/8006-14-2.html) field development that will export $41 billion in energy to China over 20 years.

Environment Minister Peter Garrett said that joint venture partner Chevron had agreed to meet the 28 environmental conditions he had set for the development of the Gorgon gas field off northwest Australia.

The conditions for the development on Barrow Island include that the developers safeguard the rare flatback turtle which shares the habitat.

"My expectation is that the company will be more than willing to meet these conditions," Garrett told reporters. "It is the case that there is agreement on the basis of the conditions that I put forward and I welcome that."

A Chevron official was not immediately available for comment on Wednesday.

PetroChina Co., Asia's largest oil and gas company, last week agreed to buy 2.25 million tons per year of liquefied natural gas from the yet-to-be developed gas field, in Australia's biggest-ever export deal.

The contract gives a huge boost to the Gorgon project, which is being developed by Australian units of global energy companies Chevron, ExxonMobil Corp. and Royal Dutch Shell PLC.

The environmental approval was the final hurdle for the gas field development.

[hostonbarry]

Maybe it's just wishful thinking, but this might be a good thing from a GHG perspective.

1. It's a lot easier to tax/restrict coal when it's not being used in your own nation's power plants -- so this could help Aussie coal be used at a slower rate

2. If the coal is to be used in China, it's more expensive to be used in China than Australia, which makes the per ton cost higher (shipping). If the marginal cost of the coal is higher, it's more likely that a greener source (hydro, wind, even nat gas) will replace it sooner.

Wishful thinking?

[Sparty]

Whatever else, if China were to replace some of it's coal fired power stations on the back of increased gas supplies for power generation from Australia it would be a good move towards less pollution.

According to recently published articles China is actually a leader in the adoption of green power and their taking Australian gas (http://www.australian-gas.com) is hopefully going to be a big part of the transition as their other short term options appear to be limited at best.