Projects a gas for supermajor

DESPITE a relatively short 60-year existence in Australia, Chevron is by no means a young company.
An oil discovery near Los Angeles in 1879 led to the birth of Chevron, and it is now one of the world’s biggest energy companies.
After heading to WA in 1952, Chevron joined Shell and Woodside in the North West Shelf Joint Venture in 1964. From then on, the company has played a significant part in Australia’s oil and gas industry.
During the last six months, Chevron has been busy with its major LNG projects off the coast of WA as part of the company’s “biggest ever exploration program”, according to its website.
Chevron Asia Pacific Exploration and Production Company president Jim Blackwell said the company would continue to pursue LNG.
“LNG continues to be a major focus of Chevron’s gas commercialisation and strategy,” Mr Blackwell said.
“Over the next decade, we expect natural gas production to grow as a proportion of Chevron’s total production.”
North West Shelf Venture
The $27 billion NWSV, one of the biggest developments off the coast of northern WA, is owned equally by BHP Billiton Petroleum, BP, Chevron, Mitsui-Mitsubishi, Shell and Woodside.
On the Burrup Peninsula near the Port of Dampier and Karratha, the NWSV has been providing WA with domestic gas for more than 25 years and LNG to Asian clients for more than 20 years.
Accounting for more than 40 per cent of Australia’s and 65 per cent of WA’s total oil and gas production, the NWSV produces LNG, natural gas, LPG, condensate and crude oil.
The venture comprises five major oil and gas fields and several smaller fields, including North Rankin, Goodwyn, Perseus, Angel, Echo Yodel, Wanaea, Cossack, Lambert and Hermes.
The new North Rankin B platform will start up in 2013 as part of the $5 billion North Rankin Redevelopment Project to extend the field life of the North Rankin and Perseus gas fields to 2040.
Additionally, three offshore platforms, an onshore gas processing facility near Karratha, and a floating production, storage and offloading vessel are part of the NWSV.
The Karratha gas plant is 1260km north of Perth and covers 200 hectares. It includes five LNG processing trains, two domestic gas trains, six condensate stabilisation units, three LPG fractionalisation units, and storage and loading facilities for LNG, LPG and condensate.
After the expansion to five trains was completed in 2008, Mr Blackwell said that the NWSV was “one of the largest [LNG projects] in the world”. Karratha’s gas plant can produce 16.3mtpa of LNG, 12,000t of domestic gas and 130,000 barrels of condensate per day.
The word ‘gorgon’ sounds gargantuan, and rightly so: Chevron’s Gorgon JV in the Carnarvon Basin offshore WA is one of the world’s largest LNG developments and the biggest natural gas venture in Australian history.
In a statement, Chevron described the Carnarvon Basin as “a premier hydrocarbon basin”.
It estimated that Gorgon would “be an important pillar of the Australian economy for more than 40 years”, according to the company’s website, providing a $64 billion boost to Australia’s gross domestic product during its first 30 years.
The Gorgon JV comprises operator Chevron (about 47.3 per cent), ExxonMobil (25 per cent), Shell (25 per cent), Osaka Gas (1.25 per cent), Tokyo Gas (1 per cent) and Chubu Electric Power (about 0.42 per cent).
The massive project site, about 130km off the coast of northwestern WA in the Greater Gorgon Area, comprises the Gorgon and Jansz-Io gas fields that contain about 40 trillion cubic feet of gas.Project construction work on Barrow Island will include a 300-hectare, 15-million-tonne-per-annum LNG plant comprising three 5 million-tonnes-perannum trains and a domestic gas plant with the ability to provide 300 terajoules per day to WA.
According to The Australian newspaper, Chevron has a fourth train for Gorgon in development, which will be supplied by the Geryon and Chandon gas fields and will bring the project’s total capacity to 20.8mtpa.
LNG to be exported will be offloaded on a 4km-long loading jetty while domestic gas will be carried onshore via a pipeline.
The first two gas processing modules have been installed on Barrow Island. Weighing nearly 3000t combined, they were the first of the large equipment to be delivered for the project.
“A total of 51 modules will be fabricated for Gorgon,” Gorgon development director Scott Young said.
“These modules form the core of the three LNG processing trains and range in size from 1000 to 7000 tonnes. Intotal, the modules will weigh more than 200,000 tonnes.”
During the next year, about three module shipments per month will be deployed from fabrication yards.
The first of 18 subsea trees was installed at the Jansz-Io gas field in September while onshore, preparations to install the domestic gas pipeline are continuing.
Site clearing for the domestic gas meter station has begun near the connection point to the Dampier to Bunbury Natural Gas Pipeline and preparations for welding the domestic gas pipeline have begun.
The deepwater section of the pipeline has been completed between Barrow Island and the mainland, while the offshore pipeline is halfway complete.
All eight Gorgon gas field wells have been drilled and cased as completions, and flowbacks will begin early next year. The Deepwater Frontier drillship has drilled the first of 10 wells in the Jansz-Io gas field.
Construction of the materials offloading facility is continuing while the accommodation village is nearly completed, and the 907t roof of the first LNG tank on Barrow Island has been craned into its final position. According to a company newsletter, construction will soon begin on the internal tankstructure.
Once completed, the tanks will be 51m high and 87m wide, and will be able to hold 180,000 cubic metres of LNG.
Recently, Chevron announced the discovery of gas at its Satyr-2 exploration well in the Greater Gorgon Area’s WA-374-P permit area, which Chevron operates with a 50 per cent interest.
The well was drilled in 1088m of water to a total depth of 3796m, finding 39m of net gas pay.
The company’s latest discovery in the Greater Gorgon Area was at the Satyr-4 exploration well (in the WA-374-P1 permit area), which encountered 67m of net gas pay and was drilled in 1088m of water to a total depth of 4579m.
The WA-374-P1 permit is 120km northwest of Barrow Island. Chevron, Gorgon and the environment After a rigorous assessment, Chevron chose Barrow Island as the location of the Gorgon project. Once complete, the development will occupy 1.3 per cent of the island’s uncleared land.
Most recently, concerns were raised about the threat of Asian geckos travelling on ships bound for Barrow Island.
Researchers at Perth’s Edith Cowan University were approached by Chevron to create a system that detected the unwanted geckos and then sent a text message to a quarantine inspector.
A dedicated quarantine system is in place on Barrow Island to maintain the company’s environmental management system.
The Gorgon Carbon Dioxide Injection Project (GCDIP) was designed to capture 3.5mtpa of carbon dioxide from the Greater Gorgon Area gas fields and store it 2.5km beneath Barrow Island.
It is estimated that the GCDIP will reduce greenhouse gas emissions from Gorgon by 40 per cent and the Federal Government has dedicated $60 million to the project.
According to the ABC, it will be the biggest geo-sequestration development of its type ever undertaken.
Predicted to cost $2 billion, it will involve all JV participants.
By 2015, the GCDIP is expected toinject between 3.4mt and 4mt of CO2 per year into its containment reservoir.
Chevron received world recognition at the Carbon Geosequestration Leadership Forum in 2010 for the GCDIP.
The company also received an award in June for the Best Practice Program at the United Nations Association of Australia World Environment Awards as acknowledgment of its excellence in environmental management.
In 2004, Chevron discovered the Wheatstone gas field in the Western Carnarvon Basin. Four years later the company vowed to develop it as an onshore LNG and domestic gas project, and construction began in December 2011.
Wheatstone is a JV between operator Chevron (73.6 per cent), Apache (13 per cent), Kuwait Foreign Petroleum Exploration Company (7 per cent) and Shell (6.4 per cent).
According to Chevron’s website, it is estimated that Wheatstone will create 6500 direct and indirect jobs during peak construction, and the JV will spend $17 billion on Australian goods and services throughout the life of the project.
After divesting its interests in Browse, Chevron now has a 100 per cent interest in the WA-205-P and WA-42-R Carnarvon Basin permits.
The company also operates WA-253-P, WA-17-R and WA-16-R as part of Wheatstone.
The foundation phase of Wheatstone is predicted to cost $29 billion, and will comprise two LNG processing trains with a combined capacity of 8.9mtpa, a 200 terajoule-per-day domestic gas plant, and offshore infrastructure such as a processing platform and drilling rigs.
According to a statement by Chevron, the foundation project will be fed with natural gas from the Wheatstone and Iago fields.
The offshore processing platform will sit in 70m of water about 225km from the coast. After processing, gas and condensate will be transported to the onshore gas plant at Ashburton North via a 225km subsea trunkline.
The onshore facility will be in the Ashburton North Strategic Industrial Area, 12km west of Onslow.
A portion of the gas extracted from the fields will be sent to the domestic plant, which will then be exported through a 90km pipeline to the Dampier to Bunbury Natural Gas Pipeline.
The rest of the gas will be exported by LNG tankers.
The WA and Federal Governments gave the final approval needed for the 25mtpa project, which was officially signed by Mr Barnett and Federal Resources and Energy minister Martin Ferguson.
Protecting the environment Chevron is required to adhere to strict environmental conditions for Wheatstone.
It is also introducing a $13 million offsets package that includes $3.5 million to be spent during four years on the environmental management of humpback whales,
dugongs and snubfin dolphins.
Protecting fishers
Because project operations include dredging, which may cause the water to become turbid, and permanent impacts such as difficulty in accessing fishing grounds could interrupt the activities of commercial fishers in the area, Chevron, the WA Fishing Industry Council (WAFIC) and the Fisheries Department have been working together to deal with assessment claims for compensation by affected fishers.
WAFIC’s Mark Tucek told the ABC that the arrangement was a good outcome. “It’s really a terrifically good example of co-operation between the resource sector proponents and the fishing industry and the Department of Fisheries in this case. It’s a great model for us to look at for other situations like this,” he said. “Potentially-affected fishers have already been notified by WAFIC of the process and I believe the department is very shortly going to send out notices again to these affected fishers, outlining the process and seeking their responses if they feel they are going to be affected.”
First gas for the Wheatstone project is scheduled for production in 2016.
No longer browsing
With three gas and condensate fields 425km offshore the Kimberley coast north of Broome, and an onshore LNG plant planned for the WA Government’s Browse LNG Precinct 60km north of Broome near James Price Point, the Browse LNG development is arguably one of the most controversial and highly-publicised oil and gas projects in WA’s history.
In late August this year, Chevron officially bowed out of Browse, however it wasn’t a complete loss for the company.
A deal between Shell and Chevron was described to the ABC as a “win-win” by business commentator Tim Treadgold, as Chevron acquired assets closer to its existing facilities and what it is building as part of the Gorgon and Wheatstone developments.
Shell paid Chevron $450 million for its 16.7 per cent share in the East Browse titles (WA30R, WA31R, WA32R, WAR2 and TR5) and its 20 per cent stake in the West Browse titles (WA28R, WA29R and WA275P).
In exchange, Chevron gained Shell’s interests in the Clio and Acme fields in the Carnarvon Basin.
“Acquiring the remaining interests in WA-205-P and WA-42-R fits strategically with our long-term plans to grow our Wheatstone area resource base and create expansion opportunities for the Wheatstone project,” Chevron vice chairman George Kirkland said.
WA Premier Colin Barnett told the ABC that he supported the trade.
“Obviously Chevron would not want to be involved in three LNG projects at once just in Western Australia, so I think it’s a sensible rationalisation; it’s good news,” he said.
Browse is now being developed by Woodside, Shell, BHP Billiton and Mitsui-Mitsubishi.
According to Woodside’s website, Browse “represents substantial opportunities for economic and social development in the Kimberley region of Western Australia”.

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