Offshore staff

HOUSTON – Apache Corp says its Australian subsidiary and partners have sanctioned development of the Chevron-operated Wheatstone LNG project of Western Australia.

The first phase will comprise two LNG processing trains with a combined capacity of around 8.9 MM metric tons/yr (9.8 MM tons/yr), an onshore gas plant, and associated onshore/offshore infrastructure.

Apache and partner KUFPEC will develop the facilities to supply gas to Wheatstone from the offshore Julimar and Brunello natural gas fields in the Carnarvon basin, with an anticipated net investment to Apache, including drilling, transportation, and other infrastructure, of about $4 billion, spread over five years. First production is slated 2016.

Wheatstone is a joint venture between the Australian subsidiaries of Chevron (73.6%), Apache (13%), Kuwait Foreign Petroleum Exploration Co. (7.0%), and Shell (6.4%). Apache, Chevron, and KUFPEC have signed long-term LNG sales-and-purchase agreements with Tokyo Electric Power and Kyushu Electric Power Co.

Apache Chairman and CEO G. Steven Farris said: “This is a long term, legacy asset. Apache will realize value over more than 20 years from its Julimar and Brunello gas discoveries, which combined have estimated recoverable gas in excess of 2.1 tcf.

“Wheatstone also represents Apache's first project in the growing worldwide market for LNG, providing an additional pathway for premium pricing of our gas resources offshore Australia,” Farris said. “It's also scalable, allowing for development of any future discoveries in the Carnarvon basin, where we hold interests in several prospective blocks.”

09/26/2011