Chevron has made two deepwater gas discoveries in the Carnarvon Basin off Western Australia that the company believes have the potential to drive expansions of its Gorgon and Wheatstone LNG projects in the same region. The discoveries are Pinhoe-1, located in 932m of water in the 3,627 km2 WA-383-P, which encountered around 60m of net gas pay, and Arnhem-1, located in 1,208m of water in the 3,782 km2 WA-364-P, that confirmed 45.5m of net gas pay. According to Melody Meyer, Chevron Asia Pacific Exploration and Production Company president, “These discoveries in the Exmouth area are significant as they are located farther out from other discoveries in the greater Gorgon and Wheatstone development in the Carnarvon Basin and indicates development potential in the broader region.”
Along with a number of other operators off Western Australia, Chevron has had to deal with huge cost blowouts on major LNG projects. In December 2012 the company revealed that costs for the flagship Gorgon project had increased from US$ 37 billion to US$ 52 billion. The increases are blamed on the high dollar, union demands, high-cost local manufacturing, productivity issues and weather-related delays. While encouraging, it could be some time before these latest deepwater finds are absorbed into the infrastructure as output from the first of four LNG trains, due onstream in 2014, is already sold.
