Australia is on the path to rival Qatar as the world’s largest liquefied natural gas (LNG) producer after US energy giant Chevron signed off on its $US29 billion ($A29.63 billion) Wheatstone project.
Chevron’s vice chairman George Kirkland said the project, located in Western Australia’s Pilbara region, would be a “strong pillar of the Australian economy for decades”.
Construction is set to begin in November, creating about 6500 jobs, with the first gas exports planned for 2016. The project will initially produce about 8.9 million tonnes of LNG per year.
Wheatstone marks the second largest single investment in Australia’s resource sector after Chevron’s $43 billion Gorgon LNG project on Barrow Island, off WA’s Pilbara coast.
“Combine Wheatstone’s advantages with those of Gorgon and the results are huge with opportunities and economic benefits on a scale never seen before in Australia,” Mr Kirkland said in Perth on Monday.
With total world energy demand expected to rise 40 per cent by 2030, with most of growth in demand coming from Asia, Mr Kirkland said Wheatstone “couldn’t have come at a better time or in a better place”.
Federal Resources and Energy Minister Martin Ferguson said Chevron’s announcement meant $140 billion had been committed to new LNG investment since 2007.
“It effectively means by 2014/15 we will go from the fourth largest export nation to the second,” Mr Ferguson said.
“Having just returned from Shanghai last night where they are consumed with their focus on Australian energy produce … we’re very, very well placed as a nation.”
Ann Pickard, the chairwoman of Shell Australia, which has a 6.4 per cent stake in the project, said “with a few more projects like Wheatstone it (Australia) will be rivalling Qatar” as the largest LNG producer.
Mr Ferguson says the benefits flowing from the Wheatstone project “will be felt right across the country” as it increases government revenue.
The two LNG trains at Wheatstone will produce 8.9 million tonnes per annum of LNG initially and there is scope to increase the capacity to 25 million tonnes.
The gas will be piped to a processing plant at Onslow, which will also process LNG from the Iago gas field, operated by Chevron and Shell, located about 225km off the Pilbara coast.
Chevron has locked in 20-year contracts with foundation customers Tokyo Electric Power Company (TEPCO) and Kyushu Electric, both from Japan.
West Australian Premier Colin Barnett lauded the handling of the project so far, saying it was the “quickest and smoothest approval process” he had ever been involved in.
Wheatstone is a joint venture between Chevron (73.6 per cent), Apache (13 per cent), Kuwait Foreign Petroleum Exploration Company (7.0 per cent) and Royal Dutch Shell (6.4 per cent).
