Thai oil company PTT and the Australian government are struggling to deal with an enormous oil spill of the north coast in the Timor Sea. The leak, which started on August 21st, has created a spill stretching over 70 miles by 25 miles. Yet during the same week, Canberra granted environmental approval to Chevron & Shell’s $42 billion LNG project – one of the world’s largest.

Reports seem to show that the Australian government repeatedly downplayed the scale & threat of the Timor spill, with the Australian Green Party claiming the oil is far closer to the coast than previously reported. The West Atlas oil rig, operated by Thai state oil company PTT, is thought to be leaking about 470,000 litres of oil a day since an accident caused the rig’s evacuation on August 21. Plugging the leak will take at least another week (when a back-up rig should arrive from Singapore to drill another hole), but could take another five.

The Kimberley coast is described by Tourism Australia as “one of the world’s last true wilderness areas” while the spill could be on the scale of Exxon Valdez in Alaska.

But this didn’t cause Australian Environment Minister Peter Garrett to think twice before providing Chevron, Shell and Exxon with environmental approval to develop their goliath Gorgon LNG project off Australia’s North-West coast. He did say that the “key focus” had been on “whether Gorgon’s expansion could manage the potential effect on the flatback turtle”. (Oil companies like to focus in on how they will protect certain rare species – BP emphasised how it would take care of the turtles in Sangachal and Ceyhan as part of its BTC project as well).

The project will super-cool 15 million tonnes of gas every year from the Gorgon gas fields, liquefying it so that it can be transported to Chinese, Japanese and US markets. In total the fields hold 40 trillion cubic feet of gas.

Shell owns 25% of the project, so will receive 3.75 million tonnes of gas each year. The company already agreed to sell more than half of this – 2 million tonnes a year to Chinese state company Petrochina every year for 20 years. Kathleen Eisbrenner, Executive Vice President of Shell Global LNG, signed the 20-year contract in November 2008 in Beijing.

Kathleen Eisbrenner, Executive VP of Shell Global LNG