Julimar gas to go to Wheatstone LNG project

Chevron Australia has made an agreement with Apache Energy Ltd. and Kuwait Foreign Petroleum Exploration Co. (Kufpec) for natural gas from the companies’ Julimar and nearby Brunello fields to supply the proposed Wheatstone LNG project in Western Australia.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Oct. 23 -- Chevron Australia has made an agreement with Apache Energy Ltd. and Kuwait Foreign Petroleum Exploration Co. (Kufpec) for natural gas from the companies’ Julimar and nearby Brunello fields to supply the proposed Wheatstone LNG project in Western Australia.

The arrangement also provides for Apache and Kufpec to take a respective 16.25% and 8.7% interest in the Wheatstone facilities. Chevron will retain a 75% stake in the project.

The deal means Wheatstone is the first LNG project in Australia to attract large volumes of third-party gas supplies.

It will also extend the life of Wheatstone as it will unlock 2.1 tcf of gas reserves at Julimar and Brunello and generate a steady production for 15 years.

Apaches says the likely net capital expenditure for its part of the project will be $1.2 billion for the upstream development of its two fields which lie in permit WA-356-P plus $2.9 billion for its share of the Wheatstone facilities, including the LNG plant.

First phase of Wheatstone development is planned as a two-train LNG facility capable of producing 8.6 million tonnes/year of LNG along with pipeline gas from a domestic gas plant.

A final investment decision is expected in 2011.

The new deal removes one of Woodside Petroleum Ltd.’s third-party options for gas to supply the proposed second train at its Pluto LNG project now under construction on the Burrup Peninsula in Western Australia.

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