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Output starts for Chevron

Chevron has started production at its US$34 billion Wheatstone liquefied natural gas project in Western Australia, writes Josh Lewis.

The US supermajor revealed the milestone had been hit earlier this week, adding that the first cargo was expected to ship in the coming weeks.

“First LNG production is a significant milestone and is a credit to our partners, contractors and the many thousands of people who collaborated to deliver this legacy asset,” Chevron chief executive John Watson said.

“Wheatstone adds to our legacy gas position in Australia that will be a significant cash generator for decades to come.”

The project is expected to provide a A$50 billion (US$38.8 billion) boost to state and federal government revenues between 2009 and 2040, while adding more than A$180 billion to Australia’s gross domestic product over the same period.

First gas had been expected late last year, but that was pushed back to mid-2017 as the capital cost of the project also increased 17%, from US$29 billion to US$34 billion.

The date for the first LNG cargo also slipped back multiple times this year, with joint venture partner Woodside Petroleum revealing earlier this year it was likely to slip from July to August, and it was later pushed back to an expected September shipping date.

However, Upstream reported last week that the LNG carrier that was earmarked for Wheatstone’s first cargo had been redirected about 300 kilometres north to Dampier with production, at the time, yet to start.

Output from the second train is expected within the next six to eight months and, once fully operational, the two trains will have a combined capacity of 8.9 million tonnes per annum.

Wheatstone lies about 12 kilometres west of Onslow and, in addition to the LNG export facilities, also includes a domestic gas plant that has the capacity to supply 200 terajoules per day of gas to the local market.

Roughly 80% of the project’s foundation gas will come from the Chevron-operated Wheatstone and Iago fields, while the remaining 20% will be supplied from Woodside’s Julimar and Brunello fields.

The fields will be tied back to an offshore central processing platform, with a 225-kilometre trunkline then transporting the gas back to the onshore facilities at Ashburton North.