Korean yards eying Gorgon bonanza

South Korean shipbuilders may end an eight-month dry spell with an influx of new orders after Australia approved the $42 billion Gorgon liquefied natural gas project.

Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries have bid for Gorgon contracts that may be worth as much as $6 billion according to local reports. Gorgon partners Chevron Corp., Royal Dutch Shell Plc and Exxon Mobil Corp. may award orders as early as next month for the project off the Western Australian coast.

Oil companies including Chevron and Petroleo Brasileiro SA are venturing into deeper waters to seek reserves, increasing the need for drilling rigs and production platforms. The offshore contracts may help the South Korean shipyards recover from their worst year for new contracts since the 1970s.

The Australian government gave environmental clearance to the Gorgon project after setting 28 additional conditions, environment minister Peter Garrett said yesterday. The Gorgon partners will make a development decision after they win production licenses and development approvals, Nicole Hodgson, a Chevron spokeswoman, said yesterday.

Gorgon, about 80 miles northwest of Western Australia?s coast, is the biggest gas field discovered in Australia with an estimated 40 trillion cubic feet of resources together with other fields in the area, according to the project?s Web site. The Korean shipyards said they submitted bids earlier this year for the Gorgon gas facilities that can process 15 million metric tons a year.

Gorgon is expected to make the first shipments from the project in 2014, according to San Ramon, California-based Chevron. Gorgon has contracts to supply fuel to China, India and Japan and is among more than 12 LNG projects in the region competing for Asian buyers.

Chevron, Shell and Exxon plan to sell LNG valued at about $251 billion to customers in the Asia-Pacific region over the next 20 years, according to Australian Resources and Energy Minister Martin Ferguson.

Brazil is also developing a deepwater offshore area that contains the biggest oil field discovery in the Americas in three decades. Petrobras, Brazil?s state-run oil company, will seek more than 240 drill ships, tankers, production platforms and supply vessels as part of its five-year $174.4 billion investment plan, Chief Financial Officer Almir Barbassa said earlier this year.