Chevron subsidiary to proceed with construction of LNG Wheatstone Project in Western Australia after Chevron makes final investment decision on US$29B foundation phase, which includes two LNG processing trains, domestic gas plant, offshore infrastructure

SAN RAMON, California , September 26, 2011 (press release) – Final investment decision bolsters Chevron’s position as a leading global LNG supplier

Chevron Corporation (NYSE: CVX) today announced that its Australian subsidiary will proceed with the construction of its Wheatstone Project in Western Australia.

John Watson, chairman and chief executive officer, Chevron Corporation, said, "The Wheatstone Project is a legacy, value-creating investment that will provide Chevron with significant reserves and production growth."

Watson added, "This project, along with Gorgon LNG, is well-positioned to provide a large, secure energy supply to meet growing demand in the Asia-Pacific region, and to place Chevron as one of the world's leading LNG suppliers."
Wheatstone Project Animation

The Wheatstone Project includes a processing platform in 240 feet (73 m) of water, 140 miles (225 km) from the coast of Western Australia. An underwater trunkline will transport gas and liquids from the platform to the onshore processing facility at Ashburton North. Initial capacity is expected to be two trains of 8.9 million tons per year and could expand to 25 million tons per year of liquefied natural gas (LNG).

The foundation phase of the Wheatstone Project is estimated to cost US$29 billion (AU$29 billion) and consists of two LNG processing trains with a combined capacity of 8.9 million tons per annum (MTPA), a domestic gas plant and associated offshore infrastructure including the processing platform, subsea equipment, drilling and an export trunkline.1 First gas is planned for 2016.

The Wheatstone Project was granted final federal government approval for a 25 MTPA LNG development, paving the way for future expansion opportunities. The signing ceremony was attended by Western Australian State Premier the Hon. Colin Barnett, MLA and Australian Minister for Resources and Energy the Hon. Martin Ferguson AM, MP.

George Kirkland, vice chairman, Chevron Corporation, said, "Wheatstone will be a strong pillar of the Australian economy for decades. We have achieved this important milestone with the close support and cooperation of the Australian federal, state and local governments along with the local community, our partners and customers."

The Wheatstone onshore foundation project, located at Ashburton North, 7.5 miles (12 kilometers) west of Onslow on the Pilbara Coast, is a joint venture between the Australian subsidiaries of Chevron (operator 73.6%)2, Apache (13%), Kuwait Foreign Petroleum Exploration Company (KUFPEC 7%) and Shell (6.4%).

The foundation project will be fed with natural gas from the Wheatstone and Iago fields, which are operated by an Australian subsidiary of Chevron in a joint venture with Shell and represents 80 percent of the plant's foundation capacity.

The unique Wheatstone hub concept was developed to provide foundation infrastructure for the commercialization of Chevron's vast natural gas resources as well as a destination for third-party gas. Under the hub concept, Apache and KUFPEC will provide the remaining 20 percent of the natural gas from their Julimar and Brunello fields. Development of the two third-party fields is not included in the estimated project cost.

About 60 percent of Chevron's equity LNG off-take is presently covered under binding long-term agreements. Discussions are continuing with potential customers to increase long term off-take to more than 80 percent and to sell down equity.

Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Notes to Editor:

A fly-through video of the Wheatstone Project can be viewed here.
Once relevant approvals have been obtained, Kyushu Electric will join the project taking 1.83 percent equity interest in the upstream and 1.46 percent in the downstream, as stated in Chevron’s press release dated September 16, 2011. Chevron’s net estimated investment, after the Kyushu Electric and follow-on sell downs, is in the range of US$16–22 billion. Additional equity sell-downs are anticipated.

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