Chevron 2010 Annual Report Download - page 35

Chevron Corporation 2010 Supplement to the Annual Report 33
Production Total daily production during 2010 averaged 152,000
barrels of crude oil and condensate (25,000 net), 29,000 barrels
of LPG (5,000 net), and 2.7 billion cubic feet of natural gas (456
million net). Approximately 70 percent of the natural gas was sold
in the form of LNG to major utilities in Japan, South Korea and
China, primarily under long-term contracts. A total of 263 LNG
cargoes were sold in 2010. Additionally, 785 million cubic feet of
natural gas per day (131 million net) was sold to the Western
Australia domestic market.
Development Progress continues on several NWS Venture projects.
The North Rankin 2 Project (NR2) progressed, with fabrication of
North Rankin B jacket and topsides and modifications to North
Rankin A for process tie-ins and a barge link. Upon completion,
North Rankin A and North Rankin B platforms will be operated as
a single integrated facility. NR2 is designed to recover remaining
low-pressure natural gas from the North Rankin and Perseus fields
to meet supply needs for contractual commitments. The maximum
total daily production is expected to be 2.0 billion cubic feet of
natural gas and 39,000 barrels of condensate. Total estimated
project cost is $4.7 billion, and start-up is expected in 2013.
Work also continued on the NWS Oil Redevelopment Project.
The project is designed to replace the existing FPSO and a portion
of existing subsea infrastructure that services production from
the Cossack, Hermes, Lambert and Wanaea fields. In January 2011,
the subsea infrastructure refurbishment commenced, and comple-
tion of construction and commissioning works on the new FPSO is
expected in second quarter 2011. Production from wells tied in to
the new FPSO is anticipated to commence in third quarter 2011.
The project is estimated to cost $1.9 billion and is expected to
extend production past 2020.
Australia Upstream
The NWS Venture continues to progress
additional natural gas supply opportuni-
ties through development of several
fields on the western flank of the
Goodwyn reservoirs. The project is ex-
pected to enter FEED in second quarter
2011. These fields contain potentially
recoverable volumes of approximately
3 trillion cubic feet of natural gas and
100 million barrels of condensate.
Wheatstone
Development The Chevron-operated
Wheatstone Project includes natural-
gas-processing facilities that consist
of a two-train, 8.9 million-metric-ton-
per-year LNG facility and a separate
domestic gas plant, both located at
Ashburton North, along the West Pilbara
coast. The company plans to supply
natural gas to the facilities from two
Chevron-operated licenses, comprising
the majority of the Wheatstone Field
and the nearby Iago Field. The maximum
total daily production is expected to be
1.4 billion cubic feet of natural gas and
25,000 barrels of condensate.
Through the end of 2010, Chevron
had signed nonbinding HOAs with three Asian customers for the
delivery of about 80 percent of Chevron’s net LNG offtake per year
from the Wheatstone Project. Under these HOAs, the customers
also agreed to acquire a combined 21.8 percent nonoperated
working interest in the Wheatstone field licenses and a 17.5 percent
interest in the foundation natural-gas-processing facilities, contin-
gent on reaching a final investment decision. Negotiations continue
to convert the three nonbinding HOAs to binding SPAs.
Agreements were also signed in 2009 and 2010 with two
companies to participate in the Wheatstone Project as combined
20 percent LNG facility owners and suppliers of natural gas for
the project’s first two LNG trains. At the end of 2010, Chevron held
an 80 percent interest in the foundation natural-gas-processing
facilities. The project entered FEED in 2009, and in March 2010,
submissions for environmental approvals were lodged with the
Western Australian Environmental Protection Authority for public
comment and consideration. Also in 2010, a Native Title HOA was
reached with the local indigenous people, and the Native Title
agreement for land required to develop the project was executed in
December. In early 2011, key approvals were finalized on numerous
agreements relating to the facilities and land sites.
The final investment decision for the project is expected in the
second-half 2011. At the end of 2010, proved reserves had not been
recognized for this project.
Exploration During 2010, the company announced natural gas
discoveries at the Clio and Acme prospects in Block WA-205-P.
These 67 percent-owned and operated discoveries are expected to
support expansion opportunities at the Wheatstone LNG facilities.
At the end of 2010, proved reserves had not been recognized for
these discoveries.
Barrow
Island
Thevenard
Island
North West Shelf
LNG Facilities
Gorgon
LNG
Facilities
Wheatstone Project
Western
Australia
INDIAN
OCEAN
NORTH WEST
SHELF
Perseus
Geryon
Urania
Goodwyn
Goodwyn South
Rankin Dockrell
Wheatstone
Dixon
Orthrus
Lambert
Persephone
Montague
Egret
Wanaea
Hermes
Angel
Cossack
Maenad
Eurytion
Echo Yodel
Chandon
Chrysaor
West
Tryal
Rocks
Gorgon
Acme
North Rankin
lo/Jansz
Iago
Dionysus
Clio
Sappho
Wilcox
Lady Nora
GREATER
GORGON
Satyr
Achilles
Kentish
Knock
Brederode
Yellowglen
Torosa
Brecknock
Calliance
BROWSE
BASIN
Iago
Chevron Interest Natural Gas Field Crude Oil Field Terminal