Australia: Chevron Expects to Sell 80-85 Percent of Wheatstone LNG by mid 2012

Chevron expects to reach its goal of selling 80 to 85 percent of its liquefied natural gas from its A$29 billion ($30.25 billion) Wheatstone project in Australia by mid-2012, Chevron Australia’s managing director, Roy Krzywosinski, said on Tuesday.

“We have multiple discussions going on with potential customers and I don’t see a problem finding quality customers,” Krzywosinski told Reuters on the sidelines of the Commonwealth Business Forum in Perth, Australia.

Chevron’s Wheatstone project will initially produce 8.9 million tonnes per annum (mtpa) of LNG, with first gas is planned for 2016.

LNG developers typically try to sell at least 80 percent of project supplies into long-term contracts before making a final investment decision. Chevron moved forward with the project in September with just 5.85 mtpa, or around 65 percent in long-term contract commitments.

Chevron’s preliminary supply agreement with Korea Gas Corp (KOGAS) for 1.95 mtpa is still due to finalised, but analysts said its decision to move forward with the project signals the company’s bullishness on the LNG market, which has tightened recently, in part due to increasing demand from Japan.

Chevron is positioning itself to become one of the largest LNG producers in Australia, with the construction of the $37 billion Gorgon project, also off the coast of Western Australia, which is set to produce 15 mtpa by 2014.

Krzywosinski said Gorgon was on track to produce its first gas in 2014, despite some weather delays late last year and early this year.

“We’re looking at ways to claw that (delay) back, so I’m confident that we’re still looking at 2014 export,” Krzywosinski said.

(reuters)

[mappress]

Source: reuters, October 25, 2011; Image: chevron