Baker & McKenzie`s Global Environment Practice

The Gorgon project: legal and policy issues

On 14 September 2009, Australia’s largest commercial carbon capture and storage (CCS) project, the Gorgon Joint Venture (GJV), was approved by the Western Australian Government.

While the GJV is being undertaken in a legal and regulatory framework which is project specific rather than part of a fully integrated domestic legal framework, Gorgon itself is an integrated CCS project and is expected to be the largest long term carbon dioxide storage project in the world1 and as such has attracted much international attention. The State and Federal Governments announced in August 2009 that they would jointly accept responsibility for any long-term liabilities associated with the storage of carbon dioxide as part of the GJV.2

The development of a workable legislative framework, particularly in relation to long-term liability, has the potential to serve as a model in other jurisdictions around the world that use a similar approach to the regulation of subsurface rights.

The GJV is an unincorporated joint venture between three international energy companies: Chevron Texaco, Shell and Exxon Mobil (the GJV Partners) who propose to develop the Gorgon, Io and Janz gas fields 130 kilometres off the coast of Western Australia. The GJV Partners’ proposal for a gasprocessing facility includes a proposal for the injection up to 3.3 million tonnes of reservoir carbon dioxide into the Dupuy Formation beneath Barrow Island, a Class-A nature reserve. The GJV is expected to commence preliminary construction by the end of 2009 and major construction early in 2010.

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