Chevron, the world’s fifth biggest energy group, has revealed plans for two significant gas projects in the Asia region at a cost of perhaps $10 billion.
One will be in Thailand, but the larger more costly project will be offshore northwest Western Australia.
Chevron, which ranks second in the US energy business behind Exxon Mobil, said it will develop a five million tonnes a year export business based on its Wheatstone gas discovery off the northern West Australian coast.
At the same time the company also committed to a $US3.1 billion plant in Thailand to supply the domestic gas market.
Chevron Corporation said it and its partners have given the green light to construct the Platong Gas II natural gas project in the Gulf of Thailand. Total development cost of the field is approximately $US3.1 billion with startup scheduled for first quarter 2011.
"The Platong Gas II development, located in shallow water, 120 miles (200 km) offshore, is designed to add 420 million cubic feet of natural gas per day processing capacity. The project feeds the growing demand for gas in the domestic market. Chevron is operator and holds a 69.8 percent participating interest with Mitsui Oil Exploration Co. Ltd. (27.4 percent) and PTT Exploration and Production Public Co. Ltd. (2.8 percent)."
It will supply 14% of Thailand’s gas needs.
The Australian business will be much more expensive, and will add to the strain on production and development resources and labour and materials in the already overheated US market.
The LNG plant will be built on land by unit Chevron Australia; it will have initial capacity for at least 5 million tonnes a year, with scope for expansion. The venture will also sell gas to the local market.
In a statement issued in California and in Australia, Chevron estimated the initial phase of the development will tap 4.5 trillion cubic feet of natural gas resources which was discovered Wheatstone in 2004, and the deposit lies about 145 kilometers offshore in the Carnarvon Basin in water depths of around 200 metres. (changed this par)
"Wheatstone LNG is a tremendous growth opportunity for Chevron, providing another platform to commercialize the company’s significant natural gas resources in Australia," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Co.
"Together, the Gorgon and Wheatstone projects are expected to make Chevron a leading natural gas supplier and operator of LNG facilities in the Asia Pacific region," said Blackwell.
"Discovered in 2004, Wheatstone is located 90 miles (145 km) offshore in the Carnarvon Basin in water depths of around 650 feet (200 m). The initial phase of the development will tap an estimated 4.5 trillion cubic feet of natural gas resources located within the two Chevron-operated permits that include Wheatstone.
"The project will provide an infrastructure foundation for commercializing the Wheatstone resource, and enable the development of Chevron’s additional significant natural gas resources offshore northwest Australia," said Roy Krzywosinski, managing director, Chevron Australia, based in Perth, Western Australia. "Prospective natural gas development opportunities include additional LNG, domestic natural gas and gas-to-liquids."
"Chevron Australia is currently preparing design studies for development and production, site evaluation, and further field appraisal work. Front-end engineering and design is expected to commence in 2009.
"The Wheatstone LNG project reinforces Australia as an expanding and reliable supplier of natural gas for the 21st century. Furthermore, Chevron Australia respects government objectives to develop domestic gas projects and plans to partner with government to achieve this objective. We look forward to working with government to secure timely approvals to facilitate the Wheatstone development and contribute further to Australia’s long-term, sustainable economic growth," said Krzywosinski.
"Through its Australian subsidiary, Chevron has been present in Australia for more than 50 years. It operates the Gorgon Gas development and the Barrow Island and Thevenard Island oilfields and is a foundation partner in the North West Shelf Venture (natural gas, crude oil and condensate) and the Browse LNG development. Chevron Australia is a significant investor in offshore north-western Australia exploration, one of four global focus areas for exploration for Chevron."
Australia already has two operating LNG projects, and several more are planned.
The fifth train of the North West Shelf project is scheduled to be completed later this year and will result in additional production capacity of 4.4 million tonnes a year. Woodside’s Pluto project of 4.3 million tonnes a year is due to be completed in late 2010.
Queensland is seeing at least four new LNG projects proposed for coal seal methane (CSM) gas. These include Santos, and the processing and shipping points will be based at Gladstone.
The CSM based LNG projects are smaller in size than those proposed in north west Australia and with the reserves onshore, are not as expensive or challenging as the WA projects.
Last week the Australian Bureau of Agricultural and Resource Economics said in its 2008 Outlook statement that exports of LNG in 2007-08 are forecast to total 14.8 million tonnes, a 3% fall from 2006-07, reflecting shutdowns for maintenance at the North West Shelf and Darwin LNG plants during September and October 2007.
"In 2008-09, exports of LNG are forecast to increase to 16.9 million tonnes, reflecting additional capacity associated with the completion of the fifth train at the North West Shelf. By 2012-13, exports are projected to reach 26 million tonnes under the assumption that production is at full capacity at the expanded North West
