Chevron has completed construction of two massive liquefied natural gas plants in Australia at an eye-watering cost of $88bn — and is wasting no time in trying to change how such megaprojects are developed in the country. The US oil major is operator of the Gorgon and Wheatstone facilities in Western Australia, which together will produce almost 25m tonnes of LNG per year — enough to meet annual gas demand in the Netherlands. The new plants are part of a $200bn investment splurge that should see Australia move past Qatar to be the world’s largest LNG exporter by next year. On Friday Chevron began producing gas from the second LNG train on its Wheatstone project.
But the two Chevron-led megaprojects endured construction delays and billions of dollars in cost blowouts due to technical difficulties and rising labour costs. The US oil company, which has discovered 50tn cubic feet of gas reserves in the nearby Carnarvon basin, is seeking more cost-efficient ways to develop these resources. “Historically the LNG business has been a point-to-point approach to developing resources,” said Steve Green, president of Asia Pacific Exploration and Production at Chevron, with individual resource holders building their own facilities and pipelines, and drilling the wells if need be. “There is a more cost-effective and efficient way to see those resources developed.”
Mr Green said Chevron was talking with government and industry partners about building a sub-sea pipeline across the Carnarvon basin, a resources-rich area off the north-west coast of Western Australia. This shared infrastructure would have multiple interconnection points that allow different groups developing gasfields in the basin to tap into them, and reduce their costs by removing the need to build their own pipelines, he said. Chevron said the resource holders could join together to pay for the multibillion-dollar pipeline or engage a standalone infrastructure company to build the project.