Chevron approves $29bn LNG project

28 Sep, 2011 02:00 AM
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US ENERGY major Chevron has sanctioned a $29 billion investment in its Wheatstone liquefied natural gas project in Western Australia which will help propel Australia to become the second-largest LNG producer in the world.

Chevron vice chairman George Kirkland said yesterday the project would award $3 billion in initial contracts by the end of the year, despite recent global market turmoil, reports The Australian Financial Review.

"Everything that has happened in the past six months including the terrible Fukushima incident has only reinforced our view that . . . LNG demand is going to be higher," he said at the signing ceremony in Perth.

Last week, the federal government approved the Wheatstone venture, setting 70 conditions, including strict protocol for its initial seismic activities and dredging operations.

Its first phase will ship 8.9 million tonnes of LNG a year to Asian customers from 2016, with expansions slated to boost to 25 million tonnes a year, equivalent to Australia's present total LNG exports.

WA Premier Colin Barnett said Wheatstone, along with other committed LNG projects and the North-West Shelf, would produce a combined 45 million tonnes a year of LNG within the next few years, which would account for a quarter of the world's present output.

"This project will help position Western Australia as the world's second-biggest supplier of LNG," Mr Barnett said.

The project will be Australia's first LNG hub, allowing third parties to process their gas in future.

The Australian Financial ReviewSource: http://www.afr.com

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