Apache, KUFPEC join Chevron's Wheatstone LNG project in Australia
Posted: 22 October 2009
Apache Corporation and Kuwait Foreign Petroleum Exploration Co. (KUFPEC) are joining Chevron to develop the Wheatstone liquefied natural gas (LNG) hub in Western Australia.
Apache and KUFPEC have signed an exclusive agreement to supply gas from their Julimar and Brunello discoveries and become foundation equity partners in the Wheatstone project facilities.
"We are pleased to have an opportunity to be a foundation partner with Chevron in the first LNG hub in Western Australia," said G. Steven Farris, Apache's chairman and chief executive officer.
"Wheatstone is a potential game-changer for Apache, unlocking 2.1 trillion cubic feet of gas reserves at two of Apache's largest discoveries and generating steady production for 15 years at prices pegged to world oil markets."
"Apache will also have the opportunity to participate in future expansion of the project - an important advantage given our active exploration program in the Greater Carnarvon Basin of Australia," Farris said.
Wheatstone's first phase will consist of two LNG processing trains with a combined capacity of approximately 8.6 million tons per year. The facility will be located at Ashburton North on the mainland of Western Australia.
A final investment decision on the first phase of the project is slated for 2011, after the FEED is completed. Apache's net share of FEED costs is expected to be $110 million.
Chevron, which has a 100 per cent interest in the Wheatstone field, will operate the LNG facilities with a 75 per cent project interest.
Apache's subsidiary, Apache Julimar Pty Ltd, and KUFPEC's subsidiary, KUFPEC Australia (Julimar) Pty Ltd, will own the remaining 25 per cent project interest.
Apache Julimar has a 65 per cent interest and operates the Julimar and Brunello fields; KUFPEC Australia (Julimar) holds the remaining 35 percent.
Apache Julimar's 16.25 per cent net interest in the project may be reduced at the point of a final investment decision to accommodate investments by the project's foundation customers.
Apache's net capital for the project, before any sell-down, currently is estimated to be $1.2 billion for upstream development of the Permit WA-356-P fields and $2.9 billion for Wheatstone facilities including the LNG plant.
The funding will be disbursed over several years as the project is developed. Apache projects net sales will be approximately 190 million cubic feet of gas and 5,100 barrels of condensate per day with a 15-year production plateau.
Posted by Richard Price, Editor, EnergyME.com
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