Chevron Corporation (NYSE:CVX) announced the signing of agreements with Shell Development (Australia) Pty Ltd to bring Shell (NYSE: RDS.A) (NYSE: RDS.B) into the Chevron-operated Wheatstone Project as a natural gas supplier and equity participant.
George Kirkland, vice chairman, Chevron Corporation, said, "Chevron is pleased to welcome another participant into the Wheatstone Project. The Wheatstone hub will provide a reliable new source of energy to Australia and the region. It will also further enhance Chevron's position as a leading supplier of liquefied natural gas (LNG) in Asia-Pacific."
Under the unitization agreement with Chevron's Australian subsidiaries, Shell will assume an 8 percent participating interest in the Wheatstone and Iago natural gas fields in the Chevron-operated permits WA-253-P, WA-17-R and WA-16-R, located offshore northwest Australia.
The Wheatstone and Iago gas fields will supply Trains 1 and 2 of the Wheatstone Project, located onshore at Ashburton North in Western Australia.
Shell will also assume a 6.4 percent participating interest in the project facilities, with Chevron remaining project operator.
Chevron Australia managing director, Roy Krzywosinski, said front-end engineering and design (FEED) activity on the Wheatstone Project is nearing completion.
"The Wheatstone Project is set to become one of Australia's largest resource projects and Australia's first LNG hub. A final investment decision is expected in the second half of this year once environmental approvals and other associated agreements are finalized with various levels of government."
The first phase of the Wheatstone Project consists of two LNG processing trains with a combined capacity of 8.9 million tonnes per annum (MTPA) and a domestic gas plant.