US oil giant Chevron has moved closer to developing the huge Wheatstone liquefied natural gas project in Western Australia.
US oil giant Chevron has moved closer to developing the huge Wheatstone liquefied natural gas project in Western Australia, starting early engineering and design works for an onshore gas export plant. However, at the same time it has flagged delays and a smaller project than initial estimates released last year had indicated.
Chevron Australia managing director Roy Krzywosinski yesterday said first gas exports from the project would not start until 2016, which is a year later than indicated in project documents filed with the federal environment department last September.
The initial plan to build two LNG processing trains will go ahead but total LNG output has been downgraded from 10 million tonnes a year to 8.6 million tonnes.
Instead of the five million-tonne-a-year trains planned for Chevron's $50 billion Gorgon project, Wheatstone will use 4.3 million-tonne trains, which are the same size as that being used by rival Woodside at its Pluto project due to start producing at Karratha next year.
Chevron will also shrink the size of a planned domestic gas plant to 200 terajoules a day, down from a previous plan of about 250.
Yesterday, Chevron said it had awarded a front-end engineering and design (FEED) contract to develop the onshore Wheatstone LNG plant it wants to build at Ashburton North near Onslow.
Until last year, when Chevron declared plans to develop the offshore Wheatstone and Iago fields in the Carnarvon Basin on its own, they were seen as probable feed for an expansion of Woodside's Pluto development.
Woodside recently said it would award a FEED contract on expanding Pluto this quarter, subject to buying or discovering enough gas.
While Chevron has crept ahead in the design stage, a Pluto expansion would be quicker to build.
Compared with the five years planned for Wheatstone construction, the first Pluto train is expected to be in production next year after being approved in 2007.
Gorgon, the nation's biggest resources project to date, is expected to be approved by its owners, Chevron, Shell and Exxon Mobil, this quarter.
Chevron said it expects the Wheatstone development to follow Gorgon's by about 18 months.
Mr Krzywosinski said the company was in discussions with Shell, which owns part of the Iago field, about taking a stake in the Wheatstone project.
Chevron would not give the value of the FEED contract, or the total project, saying only that it was significant.
Mr Krzywosinski said FEED work had already started and that an offshore contract would be awarded in the next month or so.