India’s renewable revolution has officially…
Crude prices have started the…
The oil price slump has shifted the trend in new project investments towards smaller projects with faster returns and away from mega projects, and Chevron is unlikely to sanction another major LNG development in Australia, according to Nigel Hearne, managing director of Chevron Australia and head of the Australasia business unit.
“The mega projects of the past decade are giving way to smaller, more targeted investments with quicker economic returns,” Hearne said in a speech at the Committee for Economic Development of Australia on Tuesday. “As it stands there is unlikely to be another large greenfield LNG development” in Western Australia, Hearne added, as quoted by Bloomberg.
Chevron’s Gorgon and Wheatstone natural gas projects in Australia required more than $71.4 billion in initial capital expenditure, Chevron’s website says, while Bloomberg is calculating the total investment so far at $88 billion.
The $54 billion Gorgon project achieved first gas in March 2016, but has been plagued by several shutdowns since. Chevron owns 47.3 percent in each of Gorgon’s three LNG trains, with the third train in the process of startup. At Wheatstone, Chevron’s interest is 64.1 percent in each of the two LNG trains. First LNG cargo from Wheatstone is expected by mid-2017, and Hearne confirmed today that the timeline remains on schedule.
However, according to Hearne, as quoted by Bloomberg:
“I can’t see in the near term us investing in a fourth train at Gorgon or a third train at Wheatstone.”
Instead, Chevron will be focusing on generating returns, the manager said.
“We’re here to generate a return, I have to pay a dividend back for the money I’ve already spent. I need to start throwing some cash off and pay back the investment,” Hearne said, as quoted by Australia’s Business News.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…