Shell joins Chevron's Wheatstone project, Shell in Australia

Release Date: 2011-04-11

Shell will join Chevron’s Wheatstone liquefied natural gas project off the coast of Western Australia as an equity participant and natural gas supplier to the project, the US company has announced.

Chevron will sell 6.4% of its stake to Shell, and remain the operator of the project with 73.6% stake. Shell will also assume an 8% participating interest in the Wheatstone and Iago natural gas fields, which will supply the first two trains of the Wheatstone project, Reuters reported.

The agreement comes as Chevron prepares to make a final investment in the project.

Chevron Australia managing director Roy Krzywosinski said front-end engineering and design (FEED) activity on Wheatstone was nearly complete.

"A final investment decision is expected in the second half of this year once environmental approvals and other associated agreements are finalised with various levels of government," he said in an announcement.

The first phase of the Wheatstone project will have a combined capacity of 8.9 million tonnes per annum (mtpa) of LNG as well as a domestic gas plant.

Chevron is positioning itself to become one of the largest LNG producers in Australia, with the construction of the A$43 billion ($45.39 billion) Gorgon project, also off the coast of Western Australia, which is set to produce 15 mtpa by 2014.

Shell is also developing several LNG projects in Australia, and is set to make a final investment decision on its 3.5 mtpa Prelude floating LNG project this year. Shell has also proposed a coal seam gas to LNG project in Australia's eastern Queensland state.

Apache Corporation and Kuwait Foreign Petroleum Exploration Company (KUFPEC) have also signed deals to become equity participants in Wheatstone and hold 13% and 7% equity, respectively.

Tokyo Electric Power Company (TEPCO) and Kyushu Electric Power Company also intend to become equity participants in the project, according to Chevron.

Both companies have already signed heads of agreement to buy Wheatstone LNG. Korea Gas Corporation (KOGAS) has also signed a heads of agreement to purchase LNG from the project.

Type:	NORMAL
Company:	Shell in Australia
Country:	Australia
Url:	http://www.upstreamonline.com/live/article251918.ece