• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 2 hours Oil prices going Up? NO!
  • 1 day Could Venezuela become a net oil importer?
  • 6 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 2 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 20 mins Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 4 hours Could oil demand collapse rapidly? Yup, sure could.
  • 1 day Gazprom Exports to EU Hit Record
  • 43 mins Oil prices going down
  • 1 day EU Leaders Set To Prolong Russia Sanctions Again
  • 1 day Why is permian oil "locked in" when refineries abound?
  • 1 day Oil Buyers Club
  • 2 days Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 55 mins Saudi Arabia turns to solar
  • 1 day EVs Could Help Coal Demand
  • 2 days China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 19 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
Venezuela Forced To Shut Down Production As Operations Fall Apart

Venezuela Forced To Shut Down Production As Operations Fall Apart

Venezuela’s economic, social and political…

Where Will U.S. Frackers Drill Next?

Where Will U.S. Frackers Drill Next?

With oil prices having stayed…

LNG Production Starts At Wheatstone

LNG exports

Chevron has announced the start of production at its Wheatstone LNG offshore project in Australia, with exports from the facility due to begin in several weeks. Initial plans had scheduled the first cargo for mid-2017, Reuters recalls.

Wheatstone consists of two liquefaction trains that are together capable of producing 8.9 million tons of liquefied natural gas annually, which will be exported to Asian markets. The project, which cost US$35 billion (A$45 billion), is the latest addition to a string of large-scale LNG projects to come on stream in Australia, as the country seeks to exploit its offshore gas resources to dethrone Qatar as the world’s top LNG supplier.

This is Chevron’s second project in the Australian LNG rush. The first one, Gorgon, ran into a series of delays and production outages, which led to substantial cost overruns of almost US$20 billion. Gorgon started shipping LNG to Asia last April. Its annual capacity is almost twice that of Wheatstone, at 15.6 million tons of LNG.

Wheatstone also experienced cost overruns, albeit smaller: the initial cost of the project was estimated at US$29 billion. At the time, Chevron attributed the overrun to difficulties with building gas cooling equipment offshore as well as higher construction costs. Chevron is the operator of Wheatstone with a 64-percent stake, in partnership with Australia’s Woodside Petroleum, Japanese Kyushu Electric Power Co., and Kuwait Foreign Exploration Co.

Related: U.S. Oil Rig Count Falls As Prices Falter

Now that the facility is ready to start shipping LNG, the price rally that we saw earlier this year thanks to stronger Asian demand and the production delays that have plagued the Australian megaprojects may slow down. Since March, Reuters notes, LNG prices on the spot market have surged by 55 percent to US$8.50 per mmBtu.

Two more megaprojects have yet to start production off the Australian coast: Shell’s Prelude, which is one of the very few floating LNG projects, and Inpex-operated Inchtys. Two other LNG projects were shelved amid the oil and gas price drop, one by Shell, and another by Woodside Petroleum in partnership with BP and Shell.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News