Chevron greenlights Wheatstone LNG in Australia
Chevron announced on Monday that its Australian subsidiary will proceed with the construction of its $29 billion Wheatstone LNG project in Western Australia.
John Watson, CEO of Chevron, said: “The Wheatstone Project is a legacy, value-creating investment that will provide Chevron with significant reserves and production growth.”
“This project, along with Gorgon LNG, is well-positioned to provide a large, secure energy supply to meet growing demand in the Asia-Pacific region, and to place Chevron as one of the world’s leading LNG suppliers,” he added.
The foundation phase of the Wheatstone project is estimated to cost $29 billion and consists of two LNG processing trains with a combined capacity of 8.9 million tpy, a domestic gas plant and associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline.
First gas production is planned for 2016.
The Wheatstone project was granted final federal government approval last week for a 25 million tpy LNG development, paving the way for future expansion opportunities, the company said.
George Kirkland, vice chairman for Chevron, said: “Wheatstone will be a strong pillar of the Australian economy for decades. We have achieved this important milestone with the close support and cooperation of the Australian federal, state and local governments along with the local community, our partners and customers.”
The Wheatstone onshore foundation project, located at Ashburton North, 7.5 miles (12 kilometers) west of Onslow on the Pilbara Coast, is a joint venture between the Australian subsidiaries of Chevron (operator 73.6%), Apache (13%), Kuwait Foreign Petroleum Exploration Company (KUFPEC 7%) and Shell (6.4%).
The foundation project will be fed with natural gas from the Wheatstone and Iago fields, which are operated by an Australian subsidiary of Chevron in a joint venture with Shell and represents 80% of the plant’s foundation capacity.
The unique Wheatstone hub concept was developed to provide foundation infrastructure for the commercialization of Chevron’s vast natural gas resources as well as a destination for third-party gas, the company said.
Under the hub concept, Apache and KUFPEC will provide the remaining 20% of the natural gas from their Julimar and Brunello fields. Development of the two third-party fields is not included in the estimated project cost.
About 60% of Chevron’s equity LNG off-take is presently covered under binding long-term agreements.
Discussions are continuing with potential customers to increase long term off-take to more than 80% and to sell down equity, according to the company.
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