Chevron has set about gaining environmental approval for a fourth processing train at its $US54 billion ($57.7 billion) Gorgon LNG development on Barrow Island in a move industry insiders have described as procedural without any guarantee the expansion, likely to cost at least $US10 billion, will go ahead.
The fourth train would boost Gorgon's LNG output to more than 20 million tonnes a year, eclipsing the 16.3mtpa capacity of the Woodside Petroleum-run North West Shelf near Karratha.
The Greater Gorgon gas fields contain sufficient gas - estimated at more than 40 trillion cubic feet - to justify a fourth-train expansion. Chevron disclosed in its referral documents to WA's environmental regulator it would tap the Chandon, Geryon, Orthrus and Maenad fields.
But with construction of Gorgon's three-train foundation project beset by timetable and budget blow-outs, Chevron's main partners Royal Dutch Shell and ExxonMobil are thought to be not interested in an expansion.
WA's high-cost environment is also thought to be a factor in Apache appointing Macquarie Group and Goldman Sachs to help sell all or part of its 13 per cent stake in Chevron's other LNG development, Wheatstone.
Apache would not confirm the sales process, which was revealed yesterday by Bloomberg.
"During an address to a New York analyst conference in May, Apache advised the company is looking at different options with its interest in the Wheatstone LNG project to accelerate value realisation," Apache spokesman David Parker said. "This could include project financing or monetisation if the right price were offered."
Under its own pressure from shareholders demanding improved returns, Apache has been simplifying its portfolio.
Wheatstone was a defining moment for Apache because it marked the US company's first involvement in an LNG development as well as its biggest-ever capital investment. Apache owes its Wheatstone stake to a deal it and Kuwait's Kufpec struck to process gas from their Julimar-Brunello fields at Chevron's two-train LNG plant near Onslow.
Shell was also a small player in Wheatstone but, having deemed the stake counter to its preference to be an operator, sold out to Kufpec. Kufpec and Chinese parties are likely to be frontrunners to acquire Apache's Wheatstone stake, which at this undeveloped stage has been valued by analysts at $US2.5 billion.