Western Australia is set to become the "Saudi Arabia of natural gas" as other deals follow the signing of a A$50 billion (US$41.315 billion) agreement to supply liquefied natural gas to China, Premier Colin Barnett says.
The Chevron-led joint venture contract with Chinese energy giant PetroChina to supply LNG from the Gorgon development off the West Australian coast is Australia's biggest ever resources deal.
It comes a week after the signing of a A$25 billion contract to supply gas to India from the same project, breaking the A$12 billion record set a few years ago by the North West Shelf Pluto LNG project, now under construction.
Barnett said it appeared a "whole series of projects is queueing up."
"What you are seeing now is that the future production of Gorgon is being purchased around the world -- China, India, Japan and Europe and other places," Barnett told Fairfax Radio Network.
"Today I'm about to go to a signing between a major French group and Santos, who are are developing a relatively small field right up off the Kimberley coast.
This is for 2.25 million tonnes of LNG a year."
He said the Gorgon project would produce many times this amount and several other contracts were being pursued. He said while the state government had already given its final environmental approval to the project, the commonwealth had agreed on the issue of long-term liability for the carbon dioxide to be extracted from the gas.
The carbon dioxide would be reinjected below the surface as part of the largest geosequestration project ever implemented. Barnett said while the process was already being used in the North Sea, it was "world-breaking technology."
"The Gorgon gas reservoir, which is in commonwealth waters, has a 12 per cent carbon dioxide content that's naturally occurring," Barnett said. "
One of the conditions is that as the gas is brought on shore to Barrow Island, the gas is separated and reinjected hundreds, maybe even thousands of meters, below the surface into a porous body that's got a sealed structure above it. "
It will stay there during the life of the project, which will be 60 to 100 years.