Chevron Gives Wheatstone Project Green Light
SAN RAMON, Calif., September 25, 2011 - Chevron Corporation (NYSE: CVX) today announced that its Australian subsidiary will proceed with the construction of its Wheatstone Project in Western Australia.
John Watson, chairman and chief executive officer, Chevron Corporation, said, "The Wheatstone Project is a legacy, value-creating investment that will provide Chevron with significant reserves and production growth."
Watson added, "This project, along with Gorgon LNG, is well-positioned to provide a large, secure energy supply to meet growing demand in the Asia-Pacific region, and to place Chevron as one of the world's leading LNG suppliers."
The foundation phase of the Wheatstone Project is estimated to cost US$29 billion (AU$29 billion) and consists of two LNG processing trains with a combined capacity of 8.9 million tons per annum (MTPA), a domestic gas plant and associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline.1 First gas is planned for 2016.
The Wheatstone Project was granted final federal government approval for a 25 MTPA LNG development, paving the way for future expansion opportunities. The signing ceremony was attended by Western Australian State Premier the Hon. Colin Barnett, MLA and Australian Minister for Resources and Energy the Hon. Martin Ferguson AM, MP.
George Kirkland, vice chairman, Chevron Corporation, said, "Wheatstone will be a strong pillar of the Australian economy for decades. We have achieved this important milestone with the close support and cooperation of the Australian federal, state and local governments along with the local community, our partners and customers."
The Wheatstone onshore foundation project, located at Ashburton North, 7.5 miles (12 kilometers) west of Onslow on the Pilbara Coast, is a joint venture between the Australian subsidiaries of Chevron (operator 73.6%)2, Apache (13%), Kuwait Foreign Petroleum Exploration Company (KUFPEC 7%) and Shell (6.4%).
The foundation project will be fed with natural gas from the Wheatstone and Iago fields, which are operated by an Australian subsidiary of Chevron in a joint venture with Shell and represents 80 percent of the plant's foundation capacity.
The unique Wheatstone hub concept was developed to provide foundation infrastructure for the commercialization of Chevron's vast natural gas resources as well as a destination for third-party gas. Under the hub concept, Apache and KUFPEC will provide the remaining 20 percent of the natural gas from their Julimar and Brunello fields. Development of the two third-party fields is not included in the estimated project cost.
About 60 percent of Chevron's equity LNG off-take is presently covered under binding long-term agreements. Discussions are continuing with potential customers to increase long term off-take to more than 80 percent and to sell down equity.
Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.
Notes to Editor:
- A fly-through video of the Wheatstone Project can be viewed here.
- Once relevant approvals have been obtained, Kyushu Electric will join the project taking 1.83 percent equity interest in the upstream and 1.46 percent in the downstream, as stated in Chevron’s press release dated September 16, 2011. Chevron’s net estimated investment, after the Kyushu Electric and follow-on sell downs, is in the range of US$16–22 billion. Additional equity sell-downs are anticipated.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release of Chevron Corporation contains forward-looking statements relating to Chevron's operations in Australia that are based on management's current expectations, estimates and projections about the petroleum, chemicals, and other energy-related industries. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimates," "budgets," "will supply," "will be supplied" and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are crude-oil and natural-gas prices; refining, marketing and chemicals margins; actions of competitors or regulators; the competitiveness of alternate-energy sources or product substitutes; technological developments; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company's operations due to war, accidents, political events, civil unrest, severe weather or crude-oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries (OPEC); the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from pending or future litigation; the company's acquisition or disposition of assets; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign-currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading "Risk Factors" on pages 32 through 34 of the company's 2010 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements.
Published: September 2011