Chevron has given the green light to start work on the proposed Wheatstone LNG project in Western Australia, the approval has come after Chevron received federal approval to build the 25 million tpa LNG liquefaction plant last week.
John Watson, chairman and chief executive officer, Chevron Corporation, said, "The Wheatstone Project is a legacy, value-creating investment that will provide Chevron with significant reserves and production growth."
Watson added, "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."
The project includes a processing platform in 240 feet (73 m) of water, 140 miles (225 km) from the coast of Western Australia. An underwater trunkline will transport gas and liquids from the platform to the onshore processing facility at Ashburton North. Initial capacity is expected to be two trains with a capacity of of 8.9 million tpa each.
The initial phase of the project is expected to cost a hefty US$ 29 million and first gas is expected in 2016. The federal approval the project has received though allows for expansion up to 25 million tpa capacity from the initial 8.9 as well.
George Kirkland, vice chairman, Chevron Corporation, 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 km) west of Onslow on the Pilbara Coast, is a joint venture between the Australian subsidiaries of Chevron (operator 73.6%)2, 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 in a joint venture with Shell and represent 80% of the plant's foundation capacity.
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.
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