Australia's Wheatstone Offshore Gas Project Delayed

U.S. oil major Chevron has announced that the first exports from Australia’s Wheatstone offshore gas project will be delayed from later this year to the middle of 2017.

The $29 billion Wheatstone Project is one of Australia’s largest resource projects. It is located at Ashburton North, 12 kilometers west of Onslow in Western Australia. The project will consist of two LNG trains with a combined capacity of 8.9 million metric tons per annum and a domestic gas plant.

Wheatstone is a joint venture between Australian subsidiaries of Chevron (64.14 percent), Kuwait Foreign Petroleum Exploration Company (13.4 percent), Woodside Petroleum Limited  (13 percent) and Kyushu Electric Power Company (1.46 percent), together with PE Wheatstone Pty Ltd, part owned by TEPCO (eight percent).

“We were successful in mitigating further delays, and all modules required for train one are now on site. Piping and cabling work is ongoing. The pace of this work will determine critical path towards first LNG, which is expected to be midyear 2017,” said Chevron’s CEO John Watson during presentations to investors.

For Chevron, the Wheatstone delay is another setback in becoming Australia’s biggest LNG producer and leading LNG operator in the Asia-Pacific region. The company’s flagship Australian development, Gorgon, is finally close to first LNG after being delayed and running over-budget.

After the Chevron announcement, Woodside said that the Julimar project, which will supply gas to the Wheatstone onshore plant, remains on schedule and on budget. Woodside has a 65 percent equity interest in the Julimar project and is operator of the development.