Australia: Apache, Kuwait join Chevron in Wheatstone gas project.

Byline: manish03

APACHE and Kuwait Foreign Petroleum Exploration Company are to join Chevron in the development of the Wheatstone liquefied natural gas project in Western Australia. The companies will supply gas from their Julimar and Brunello discoveries and will take a stake in Wheatstone facilities.

Apache will invest $US1.2 billion ($1.3 billion) in developing the gas fields that will help feed Wheatstone's LNG terminal, and $US2.9 billion in building the facilities that will help supply Asia's burgeoning gas market.

Apache expects net sales of 5.4 million cubic metres of gas and 5100 barrels of gas condensate per day. Apache and KUFPEC will jointly own 25 per cent of the Wheatstone LNG facilities, and Chevron will own the remaining 75 per cent.

Apache's net interest in the project will be 16.25 per cent, although it might be reduced at the time of a final investment decision to accommodate investments by buyers, the company said.

A final investment decision on the first phase of the project is scheduled for 2011. Apache chief executive G Steven Farris said: "We like to think it's a game changer for us, especially in Australia."

Chevron, the second largest US oil company by market capitalisation, will keep its 100 per cent interest in the Wheatstone gas field. The Apache and KUFPEC move strengthens the international presence of the Texan oil and gas independent.

It follows a series of milestones in international operations that range from an agreement to provide natural gas to an LNG terminal in British Columbia that will supply Asian markets to drilling in Chile.

"Our mission statement is to build a global (exploration and production) company," said Mr Farris. "This is part of that evolution." Apache, one of the largest exploration and production companies in the US, decided in the 1990s to begin extending its empire beyond North America's borders, starting with investments in Egypt, the North Sea and Australia.

The fourth quarter of 2008 marked the first time when more than half of the company's production - 50.62 per cent - came from outside of North America, said spokesman Bill Mintz.

Apache's growing international presence comes at a time when low prices for domestic natural gas have cut the profits of many North American-bound companies. Companies that focus on oil - which overnignt traded above $81 per barrel - and those that have broad international operations have fared better.

The abundance of natural gas in North America - a result of investment and technological breakthroughs in the exploitation of so-called gas shales, tight rock reservoirs rich in gas - is making the divergence between domestic gas markets and everything else clearer, said Mr Farris.

"I'm not a big proponent that we're going to see significant increases in natural gas prices in this country," Mr Farris said. But the "world is insatiable for crude oil," he added.

Copyright : Euclid Infotech Pvt. Ltd.

Provided by Syndigate.info an Albawaba.com company