(EnergyAsia, September 29 2011, Thursday) — Chevron Corporation said it has given the approval for its Australian subsidiary to develop the US$29 billion foundation phase of its proposed giant Wheatstone liquefied natural gas (LNG) export complex in Western Australia state.
As the project’s operator, the US major announced its decision after the Australian government granted final approval for the construction of a 25 million tonnes/year LNG project at Ashburton North, located 12 km west of Onslow on the Pilbara Coast.
The foundation phase consists of two LNG processing trains with a combined capacity of 8.9 million tons per year (mt/y), a domestic gas plant and associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline.
Wheatstone, a joint venture between the Australian subsidiaries of Chevron (73.6%), Apache (13%), Kuwait Foreign Petroleum Exploration Company (KUFPEC 7%) and Shell (6.4%). is expected to begin exporting LNG to Asia in 2016. The complex will be fed with natural gas from the offshore Wheatstone and Iago fields, which are operated by an Australian subsidiary of Chevron in a joint venture with Shell.
Describing it as a “unique hub concept”, Chevron said Wheatstone was developed to provide foundation infrastructure to commercialise its as well as the vast natural gas resources of other companies.
Under the hub concept, Apache and KUFPEC will provide the remaining 20% of the natural gas from their Julimar and Brunello fields. Development of these two fields is not included in the estimated project cost.
Chevron said that about 60% of its equity LNG off-take has been committed under binding long-term agreements, with talks continuing with potential customers to increase that to more than 80% and to acquire equity in the project.
John Watson, Chevron’s chairman and CEO, 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.”
George Kirkland, Chevron vice chairman, 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.”