Toll wins $180m contract

Toll is expected to start work on Barrow Island, off the north-west coast of Western Australia, once the Gorgon project has received government sign-off and a final investment decision is made later this year.

The Chevron, Shell and ExxonMobil joint venture has been busy rolling out contracts over the past few weeks. Earlier this month it awarded Leighton Holdings subsidiary Thiess, along with Decmil and Kentz, a $500 million joint-venture contract to build a 3300-bed construction village for the project.

In announcing the contract, Toll managing director Paul Little said his company would look at making further resource-based investments.

"The Toll group plans to execute the scope of work of this contract through the WA-based operations of Toll Energy, which specialises in providing supply-chain management and logistics services to the oil and gas exploration, construction and production industries in Australia," he said.

"Toll intends to look at further investments and organic growth in the resources sector both in Australia and overseas. The resources business continues to be a strong performer for the group."

Chevron is the operator of the Gorgon project, holding 50per cent, with Shell and Exxon having 25 per cent each. The joint-venture partners have applied to expand the original two-train, 15-million-tonne-a-year project to include a 35-million-tonne-a-year LNG train.

If it proceeds, it will be a major boon for the economy. The Gorgon gas fields contain about 40 trillion cubic feet of gas and have a life expectancy of 60years. But analysts have warned that the global slump in demand for LNG could delay some projects.

The Gorgon project is well behind Woodside's 100 per cent-owned, $12billion Pluto project in Western Australia, which is on track to deliver to customers next year.

Sluggish demand is predicted to recover from 2013 as countries move towards emissions trading schemes and continue to search for cleaner fuel sources.

The Federal Government, whose final approval is needed on the Gorgon project, supports the project. Resources Minister Martin Ferguson told an Australian Petroleum Production and Exploration Association conference this month that a final investment decision was expected in the "very near future".

KEY POINTS

- Toll awarded $180m contract at Gorgon's $50bn liquefied natural gas project.

- Work may start later this year.

- Government approval needed for the project to go ahead.