Chevron Gives Wheatstone Project Green Light
Final investment decision delivers major boost to Australian economy
PERTH, Aust., September 26, 2011 – Chevron Australia Pty Ltd today announced that it will begin construction immediately on the Chevron-operated Wheatstone Project at Ashburton North, 12 kilometres west of Onslow on the Pilbara Coast in Western Australia.
The foundation phase of the Wheatstone Project is estimated to cost AU$29 billion and consists of two LNG processing trains with a combined capacity of 8.9 million tonnes per annum (MTPA), a domestic gas plant and associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline. 1 First gas is planned for 2016.
Melody Meyer, president, Chevron Asia Pacific Exploration and Production Company, said the Wheatstone Project will boost Australia’s position as a major liquefied natural gas (LNG) player on the world energy stage and support Asia Pacific’s rapid growth with cleaner burning fuel.
“Wheatstone’s go-ahead will provide vital supplies of natural gas to Australia and the region. Combined with the Gorgon LNG project, this further enhances Chevron’s position as a leading supplier of natural gas in the Asia-Pacific region,” Meyer said.
Roy Krzywosinski, managing director, Chevron Australia, said, “The Wheatstone Project will deliver an estimated 6,500 direct and indirect jobs during peak construction, generate an estimated $20 billion in government revenue, and provide an estimated $17 billion to Australian businesses and services over the project life.2”
The Wheatstone Project was granted final government approval for a 25 million MTPA LNG development and a domestic gas plant, paving the way for future expansion opportunities. The signing ceremony was attended by Western Australian State Premier the Hon. Colin Barnett, MLA and Australian Minister for Resources and Energy the Hon. Martin Ferguson AM, MP.
Mr. Krzywosinski thanked the Federal, State and local governments for their ongoing support: “The Wheatstone vision has been realised with the close cooperation of governments, the community, partners, and our customers. Chevron has a long history in Australia and with the Wheatstone and Gorgon projects now both underway, we will continue to build on this legacy for decades to come.
“The Wheatstone Project represents Australia’s first natural gas infrastructure hub that has attracted third-party natural gas. This unique project is a game changer for the industry enabling the future development of Chevron’s vast natural gas resources, as well as third party natural gas located offshore Western Australia,” added Krzywosinski.
The Wheatstone onshore foundation project 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 percent of the plant’s foundation capacity.
The unique Wheatstone hub concept was developed to provide an infrastructure foundation for the commercialization of Chevron’s vast natural gas resources as well as a destination for third-party gas. Under the hub concept, Apache and KUFPEC will provide the remaining 20 percent 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 percent of Chevron’s equity LNG off-take is under binding long-term agreements. Discussions are continuing with potential customers about equity agreements and associated planned equity sell-downs to increase long-term off-take to more than 80 percent.
Chevron Australia is a significant investor in exploration offshore northwest Australia, leads the development of the Gorgon and Wheatstone natural gas projects and operates Australia’s largest onshore oilfield on Barrow Island as well as the Thevenard Island oilfields. The company also manages its equal one-sixth interest in the North West Shelf Venture and is a participant in the Browse liquefied natural gas development in Western Australia.
Notes to Editor:
1. A fly-through video of the Wheatstone Project is available for downloading
2. ACIL Tasman – independent analysis of economic benefits of the project to Australia (2011)
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