Is Australia the place to be? Gorgon Project.

Super boom forecast as Gorgon go-ahead looms

$50 billion Gorgon LNG project are about to sign off on the project after the Federal and State governments removed one of the last hurdles yesterday.

Kevin Rudd also revealed his reliance on Gorgon to help Australia through the global recession and told Parliament the project would have huge financial benefits for decades.

"This is the largest resource project ever proposed in Australia," the Prime Minister said. "The Gorgon project will make an important contribution, assuming it proceeds, to the Australian economy and our energy security for many, many decades."

The project is seen in Canberra as the private sector's stimulus package which will employ up to 10,000 people in construction and generate 3500 permanent jobs. In its first 30 years, it will earn the Federal and State governments about $40 billion.

WA infrastructure projects alone will get up to $100 million directly under a Labor election pledge.

Under a deal announced yesterday, the Federal and WA governments accepted liability for any long-term problems from pumping carbon dioxide into deep sea aquifers.

While long-term contracts have been signed, including a $10 billion, 20-year deal with India's Petronet LNG, final approval is needed from Gorgon's joint venture partners Chevron, ExxonMobil and Shell.

Mr Rudd became confident the project would be delivered after a meeting last week with Shell chief executive Peter Voser, who also met WA Premier Colin Barnett last week.

Mr Barnett said the decision removed the final hurdle for Gorgon. "The space is now clear for the Gorgon partners to proceed and I am confident they will," he said.

He ruled out extending a blanket guarantee to other planned carbon geo-sequestration projects.

The news on Gorgon came as business leaders and policy makers showed growing optimism about the nation's economy in the long term.

At the Australian Industry Group's annual conference, Leighton Holdings chief executive Wal King predicted a continuing commodities super-cycle with the world's population expected to grow to nine billion within 30 years from 6.5 billion.

Treasury secretary and Reserve Bank board member Ken Henry said Australia would emerge strongly from the recession as investors globally recognised the key advantages it held over much of the developed world.

"The Australian economy will be seen as possessing the best of the qualities - of governance and flexibility - of the developed world while offering an abundance of real investment opportunities usually found only in the developing world," he said.

But he warned a second shockwave that delayed recovery was possible.

Demand from China also continues to amaze most policy makers.