Chevron Corporation announced that its Australian subsidiary will proceed with the construction of its Wheatstone Project in Western Australia.

John Watson, chairman and chief executive officer, Chevron Corporation, said, "The Wheatstone Project is a legacy, value-creating investment that will provide Chevron with significant reserves and production growth."

Watson added, "This project, along with Gorgon LNG, is well-positioned to provide a large, secure energy supply to meet growing demand in the Asia-Pacific region, and to place Chevron as one of the world's leading LNG suppliers."

The foundation phase of the Wheatstone Project is estimated to cost US$29 billion (AU$29 billion) and consists of two LNG processing trains with a combined capacity of 8.9 million tons per annum (MTPA), a domestic gas plant and associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline.1 First gas is planned for 2016.

The Wheatstone Project was granted final federal government approval for a 25 MTPA LNG development, paving the way for future expansion opportunities. The signing ceremony was attended by Western Australian State Premier the Hon. Colin Barnett, MLA and Australian Minister for Resources and Energy the Hon. Martin Ferguson AM, MP.

George Kirkland, vice chairman, Chevron Corporation, said, "Wheatstone will be a strong pillar of the Australian economy for decades. We have achieved this important milestone with the close support and cooperation of the Australian federal, state and local governments along with the local community, our partners and customers."

The Wheatstone onshore foundation project, located at Ashburton North, 7.5 miles (12 kilometers) west of Onslow on the Pilbara Coast, is a joint venture between the Australian subsidiaries of Chevron (operator 73.6%)2, Apache (13%), Kuwait Foreign Petroleum Exploration Company (KUFPEC 7%) and Shell (6.4%).

The foundation project will be fed with natural gas from the Wheatstone and Iago fields, which are operated by an Australian subsidiary of Chevron in a joint venture with Shell and represents 80 percent of the plant's foundation capacity.

The unique Wheatstone hub concept was developed to provide foundation infrastructure for the commercialization of Chevron's vast natural gas resources as well as a destination for third-party gas. Under the hub concept, Apache and KUFPEC will provide the remaining 20 percent of the natural gas from their Julimar and Brunello fields. Development of the two third-party fields is not included in the estimated project cost.

About 60 percent of Chevron's equity LNG off-take is presently covered under binding long-term agreements. Discussions are continuing with potential customers to increase long term off-take to more than 80 percent and to sell down equity.