Chevron Sanctions $29 Billion Wheatstone Project in Western Australia

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Researched by Industrial Info Resources Australia (Perth, Australia)--Chevron Corporation (NYSE:CVX) (San Ramon, California) sanctioned the $29 billion Wheatstone project in the West Australian Pilbara region just days after the federal Australian government granted environmental approval. The Wheatstone project includes a two-train liquefied natural gas (LNG) plant with a foundation capacity of 8.9 million metric tonnes per year, and a 190 million-standard-cubic-feet-per-day gas processing plant, based at the Ashburton North Gas Hub, under development near the town of Onslow.

Offshore, the 35,000-tonne Wheatstone gas and condensate processing platform will extract natural gas from the Wheatstone, Iago, Julimar and Brunello fields in the Carnarvon basin. The globally significant gas resource was discovered by Chevron in August 2004, and development for the project began in March 2008.

Wheatstone joint venture partners Chevron, Apache Corporation (NYSE:APA) (Houston, Texas), Kuwait Foreign Petroleum Exploration Company (KUFPEC) and Shell Development (Australia) Pty Limited made the final investment decision just four days after receiving federal government environmental approval. West Australian state government approval was granted on August 31, and 25 strict conditions were placed on Chevron to protect the marine environment and threatened and migratory animals; that number has now been bumped up to 70 conditions. Chevron will be required to submit a range of plans and programs to Environment Minister Tony Burke and the Department of Sustainability, Environment, Water, Population and Communities, detailing environmental impact minimization procedures to be achieved during the project's development.

Financial approval for the project signalled an almost immediate beginning to construction, with the engineering, procurement and construction contract awarded to Bechtel Corporation (San Francisco, California), and a team of Bechtel employees will be ready to mobilize to the site in mid-October.

Awards for upstream construction and installation contracts will be announced by the end of the 2011 calendar year. First-tier contracts for both onshore and offshore Wheatstone have been issued well in advance, with the provision that environmental and financial approvals be granted. During peak construction, an estimated 6,500 direct and indirect jobs will be filled.

For more information, see September 12, 2011, article - Chevron's Wheatstone LNG Project Granted Environmental Approval by West Australian State Government.

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