Chevron Bets Big On Australian Shale Given Asian Demand
Domestic natural gas production in the United States has surged by as much as 20% over the last five years. According to BP’s Energy Outlook, the United States’ shale-based oil and gas reserves will allow the country to become self-sufficient in energy by 2030. ((“BP Energy Outlook 2030“, January 2013)) Australia is another region that boasts of significant shale gas resources. According to a 2011 estimate by the U.S. Energy Information Administration (EIA), the country holds 396 trillion cubic feet of technically recoverable shale gas – around 6% of the world’s total.  Unlike the United States, Australia’s reserves haven’t been tapped in a big way yet, but that is set to change with oil and gas majors like Chevron beginning to place big bets on the country.
Chevron (NYSE:CVX) has been spearheading the development of natural gas in Australia with around 47% stake in the Greater Gorgon Area, the country’s biggest domestic source of natural gas. The company’s mega-scale Gorgon Project includes 8.9 million-metric-tonne-per-year Liquid Natural Gas facility that is scheduled to begin operations in 2014. Apart from Gorgon, the company also has significant interests in other large scale, upcoming projects such as Wheatstone and Browse.
Chevron is also trying to take Australian production levels a step further. Having established its interests in conventional natural gas resources, Chevron is now busy pumping money into developing Australia’s unconventional resources as well. In February this year, the company announced its intention of spending as much as $349 million for acquiring land in Central Australia, which may hold huge shale gas deposits.
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