Green light for 'unique' LNG project

Third party hub concept sets Chevron Australia's $29 billion Wheatstone liquefied natural gas Pilbara Project apart

Green light for 'unique' LNG project
Green light for 'unique' LNG project

By Anna Game-Lopata | September 27, 2011

Chevron Australia's $29 billion Wheatstone Project liquefied natural gas (LNG) project in Western Australia represents Australia’s first
infrastructure hub to attract third-party natural gas.

Following final government and environmental approvals granted earlier in the month the Wheatstone Project will begin construction immediately paving the way for a 25 million tonnes per annum LNG domestic gas plant and future expansion opportunities.

"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," says Chevron Australia managing director Roy Krzywosinski (pictured).

Located 12 kilometres west of Onslow in on the Pilbara Coast of Western Australia, Wheatstone is set to become one of Australia’s largest resource projects.

Chevron Asia Pacific Exploration and Production President Melody Meyer says the project will provide greater security of supply and significant economic benefits such as employment, government revenue and local business opportunities.

"In conjunction with the Gorgon Project, it will reinforce our position as a leading natural gas supplier and LNG operator in the Asia-Pacific region," Meyer says.

Chevron holds an approximate 73 percent interest in the project.

Recently signed up equity partners include local subsidiaries of Apache Corporation (13 percent), Kuwait Foreign Petroleum Exploration Company (7 percent) and Shell (6.4 percent).

The foundation project will be fed with natural gas from the Wheatstone and Iago fields operated by an Australian subsidiary of Chevron in a joint venture with Shell, representing 80 percent of the plant’s capacity.

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

Gas will be processed at the onshore Ashburton North facility which will include two LNG trains with a combined capacity of 8.9 million tonnes per year and the gas plant.

The initial phase of the Wheatstone Project will also comprise associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline.

"Ashburton North, in north Western Australia, is an ideal location for an LNG hub given its proximity to all the discovered gas resources in the Western Carnarvon Basin," Meyer adds.

"There are precious few good, suitable port sites in the region and the Wheatstone plant provides a foundation for commercialising both existing and future gas resources.

"Wheatstone’s go-ahead will provide vital supplies of natural gas to Australia and the region."

WA Premier Colin Barnett says the project will help position Western Australia as the world’s second-biggest supplier of LNG.

"Wheatstone, along with other committed LNG projects and the North-West Shelf, will produce a combined 45 million tonnes per annum of LNG within the next few years, which will account for 25 per cent of current world production levels," Barnett says.

Currently the North-West Shelf produces 17 million tonnes per annum, which represents nine per cent of the world’s LNG.

LNG production from WA is set to reach more than 60 million tonnes a year by 2020.

"The Wheatstone project, is expected to create 6,500 jobs at peak construction and deliver an estimated $17billion to Australian businesses and services over the life of the project," the Premier adds.

Site works are due to begin before the end of this year, and the first delivery of LNG from 2016.

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