Chevron has predicted that its giant Wheatstone project, which will cost $29 billion to develop and create 6,500 jobs at the peak of construction, will be a game changer for the liquefied natural gas (LNG) industry. (Click through for video.)
Chevron has predicted that its giant Wheatstone project, which will cost $29 billion to develop and create 6,500 jobs at the peak of construction, will be a game changer for the liquefied natural gas (LNG) industry.
The company announced today that it will begin construction immediately.
The Wheatstone project, which will consist of two LNG trains with the capacity to produce 8.9 million tonnes each year and an offshore processing facility, is a joint venture between Chevron, USA-based Apache Energy, Kuwait’s Kufpec and Royal Dutch Shell.
Chevron vice chairman George Kirkland said Wheatstone would "raise the bar as Australia's first LNG hub", initially producing close to nine million tonnes a year with a maximum capacity of 25 million tonnes.
He anticipated third party gas suppliers would use Wheatstone, which would "retire the whole concept of stranded gas".
"The appeal of this LNG hub will become apparent to others," Mr Kirkland said. His comments come at a time when Perth company Woodside is also negotiating with gas suppliers for additional feed for an expansion of its Pluto gas project.
Mr Kirkland said the Wheatstone project could not have come at a "better time or a better place", with the total world energy demand expected to rise 40 per cent by 2030.
He said 60 per cent of that growth in energy demand would be in Asia.
Premier Colin Barnett said he had "never experienced a project that has advanced as quickly and as smoothly as Wheatstone".
He said the project would deliver enormous benefits, but also chose to have a dig at the federal government, which would receive the bulk of the taxes and royalties.
"A little bit of change will come the way of the state," Mr Barnett said at a press conference as federal energy minister Martin Ferguson looked on.
Mr Ferguson said the benefits of the project would be felt right across the country with increased government revenue, export income and spending on Australia goods and services.
Western Australia's peak energy user group, the DomGas Alliance, welcomed a commitment from Chevron to supply the equivalent of 15 per cent of Wheatstone's exports to the domestic market.
Chevron said the domestic gas supply would increase over time to around 500 terajules a day, from an initial base of 187 terajoules per day.
DomGas Alliance chairman Tony Petersen commended Chevron for prioritising domestic supplies of gas.
“This means domestic gas will flow into the WA market at the same time as LNG exports commence and will assist local industry as soon as possible.” Mr Petersen said.
“The project is an example of the State’s 15 per cent domestic gas reservation policy in action. It is a win for LNG exports and for local gas users.”
First LNG from Wheatstone is expected to be delivered in 2016.
Chevron received federal environmental approval for Wheatstone last week, three weeks after it was granted the state environmental nod.
Foundation customers for Wheatstone gas include Japan’s Tokyo Electric Power Company and Kyushi Electric Power Company.
