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Petroleum industry

Chevron Makes Deepwater Gas Discoveries Offshore Western Australia

Strategic Insights

— 2 min read

Chevron, a US energy giant, has made significant deepwater gas discoveries offshore in Western Australia, following a landmark liquefied natural gas (LNG) sales deal with PetroChina. The discoveries, Clio-2 and Kentish Knock-1, were made in the hydrocarbon-rich Carnarvon Basin, where Chevron is the largest leaseholder. The Clio-2 well discovered 115 meters of net gas pay, while Kentish Knock-1 discovered 34 meters of net gas pay. These discoveries are expected to play a key role in the growth of Chevron's global natural gas business.

Key Takeaways:

  • Chevron has made two deepwater gas discoveries, Clio-2 and Kentish Knock-1, offshore in Western Australia, in the Carnarvon Basin.
  • The Clio-2 well discovered 115 meters of net gas pay, while Kentish Knock-1 discovered 34 meters of net gas pay.
  • The discoveries are situated in permits WA-205-P and WA-365-P, both operated by Chevron.
  • The discoveries follow a landmark LNG sales deal between PetroChina and ExxonMobil's share of the Chevron-operated Gorgon project.
  • The Gorgon project is expected to produce 15 million tonnes per annum (Mtpa) of LNG.
  • PetroChina will buy about 2.25 million tonnes per annum (Mtpa) of LNG from ExxonMobil's share of the Gorgon project for 20 years for A$50 billion.
  • Chevron holds a 50 percent stake in Gorgon, with ExxonMobil and Shell each holding 25 percent interests.
  • The project is expected to start producing in 2014, with Chevron seeking buyers for up to 150 terrajoules per day of domestic gas from Gorgon starting in 2015.
  • Part of the domestic gas output is expected to be purchased by WA's major industrial domestic gas consumers, including Alcoa of Australia Ltd and Burrup Fertilisers Pty Ltd.

Statistics:

  • 115 meters of net gas pay discovered by the Clio-2 well.
  • 34 meters of net gas pay discovered by the Kentish Knock-1 well.
  • 2.25 million tonnes per annum (Mtpa) of LNG to be purchased by PetroChina from ExxonMobil's share of the Gorgon project.
  • 150 terrajoules per day of domestic gas to be sought by Chevron for purchase from Gorgon starting in 2015.
  • 5 percent of Gorgon's output equivalent to the domestic gas sought by Chevron.
  • A$50 billion for PetroChina's 20-year LNG purchase deal with ExxonMobil's share of the Gorgon project.
  • 15 million tonnes per annum (Mtpa) of LNG production expected from the Gorgon project.

Sources:

  • "US energy giant Chevron makes deepwater gas discoveries off Western Australia" (Asia Pulse, Aug 19)
  • "PetroChina to buy Australian LNG in US$41.29 billion deal" (Asia Pulse, Aug 19)
  • "Chevron gas fields eye domestic buyers" (AAP, June 2010)

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