* Australia government gives Wheatstone environmental go
* First phase of Wheatstone to include 8.9 mpta LNG plant,
domestic gas plant
(Recasts, adds government, Chevron comments, details)
By Rebekah Kebede
PERTH, Sep 22 Chevron Corp is expected
to make a final investment decision on its $25 billion
Wheatstone liquefied natural gas project in Western Australia on
Monday, a source close to the decision said on Thursday.
Australia's government cleared the path for the company's
approval when it gave environmental clearance to the 8.9 million
tonne per annum Wheatstone project on Thursday. Local media had
also reported that a formal announcement was expected by Monday.
"The federal environmental approval is an important
milestone in reaching the final investment decision for the
Wheatstone Project this year," George Kirkland, vice chairman of
Chevron Corporation, said in a statement.
Chevron received federal environmental approval for a 25
million tonne per annum (mtpa) LNG plant as well as a domestic
gas plant. The first phase of the Wheatstone project will have a
of 8.9 million tonnes per annum of LNG and a domestic gas plant.
Australia's government attached more than 70 conditions to
the approval of Wheatstone to limit the impact on the
environment in the area.
"While I have considered the social and economic
implications of this project, my focus has been on protecting
environmental matters of national significance through strict
conditions to manage any potential environmental impacts,"
Environment Minister Tony Burke said in a statement.
COST BLOWOUTS AND DELAYS
Chevron is positioning itself to become one of the largest
LNG producers in Australia, with the construction of the $37
billion Gorgon project, also off the coast of Western Australia,
which is set to produce 15 mtpa by 2014.
Although they will be some of the largest, Wheatstone and
Gorgon are just two of many Australian LNG projects in the
The country currently has around A$200 billion of LNG export
projects on the drawing board, and the industry is eyeing a
production goal of 60 million tonnes per annum (mtpa) by 2020,
triple current production levels of around 20 mtpa.
Wheatstone will likely face stiff competition from other LNG
projects for labour and resources, a situation which analysts
have said could cause project delays and cost blowouts across
The latest to face a significant delay was Woodside
Petroleum's Pluto project which in June reported an
almost $1 billion cost hike and trimmed its overall production
guidance at its flagship Pluto LNG project in Australia.
Contractors for the Gorgon project have also warned of
delays to the project, but Chevron has repeatedly said the
project is on time and on budget.
Chevron has agreed to several supply deals in recent months,
including with Tokyo Electric Power (TEPCO) for 3.1
mtpa and Kyushu Electric Power for 0.8 mtpa.
The company also has a preliminary supply deal with Korea
Gas Corp (KOGAS) for 1.95 mtpa.
Apache Corporation , Kuwait Foreign Petroleum
Exploration Company (KUFPEC), Royal Dutch Shell RSDa.L, and
Kyushu Electric are all equity participants in Wheatstone, and
hold 13 percent, 7 percent, 6.4 percent and 1.83 percent,
respectively while Chevron holds the rest.
KOGAS has signed a heads of agreement to acquire 5 percent
interest in the project.
(Additional reporting by Rob Taylor in Canberra; Editing by Ed
Davies and Miral Fahmy)