Wheatstone Takes a Conditional Step Forward

Western Australia's Environmental Protection Agency recommended conditional approval for Chevron's 25 billion Wheatstone liquefied natural gas (LNG) project.

The EPA recommended that the project could go ahead, but with "stringent conditions to limit environmental impacts," including a plan to offset the project's expected emissions of 10 million tonnes of carbon dioxide per year as well as measures to limit the impact of extensive dredging.

The recommendation is the first of several environmental reviews and approvals that Chevron will need to achieve its goal of making a final investment decision on the project before the end of the year.

The Wheatstone project off northwest coast of Australia will eventually produce 25 million tonne per annum of LNG, primarily for export, and the first phase of the project will have a capacity of 8.9 mtpa of LNG as well as a domestic gas plant.

Apache Corporation, Kuwait Foreign Petroleum Exploration Company, and Royal Dutch Shell (read more about Shell joining the Wheatstone project here) are equity participants in Wheatstone and hold 13 percent, 7 percent, and 6.4 percent equity, respectively.

Tokyo Electric Power Company and Kyushu Electric Power Company signed heads of agreement to buy Wheatstone LNG and reportedly may join as equity participants. Korea Gas Corporation (KOGAS) has also signed a heads of agreement to purchase LNG from the project.

Related reading:

Chevron Looks to Australian Gas to Reignite Growth