50% local content target for Wheatstone

Chevron expects that 50 per cent of the spending on development of its Wheatstone gas project, which has a capital cost of $29 billion, will go to Australian industry.

The US-based energy giant also says that the project will generate $17 billion in spending on Australian goods and services (both capital expenditure and operational expenditure) over its first 30 years.

The benefits for the local economy were outlined today at a press conference, where Chevron, its joint venture participants and government ministers announced the formal go-ahead for the giant gas project.

The proportion of local content is slightly above that for the Gorgon gas development, which is targeting $20 billion of local contracts out of a total capex budget of $43 billion; equivalent to 45 per cent local content.

Woodside’s $14.9 billion Pluto gas project expects to have slightly higher local content, at about 55 per cent.

Chevron executive George Kirkland told today’s press conference that about $3 billion worth of Wheatsone contracts were due to be awarded to local industry by the end of the year.

Chevron is also expected to formally appoint Houston-based Bechtel as the project’s main engineering contractor, and Korean shipyard DSME for construction and delivery of the offshore platform.

In addition, Bechtel has already entered agreements with GE Oil & Gas for the supply of compression technology for Wheatstone’s two LNG processing trains.

Onslow will be one of the major beneficiaries of the project, which is being built just west of the town at the Ashburton industrial estate.

Premier Colin Barnett said new community and public infrastructure, potentially worth more than $250 million, would be built as part of the project.

Chevron will spend $120 million on “public” infrastructure such as roads, waste management, school facilities and housing, and $66 million on “community” infrastructure such as the airport, a library, swimming pool and town planning and beautification.

The state will contribute $10 million to infrastructure development.

Mr Barnett said the town’s population was tipped to increase from 700 to 2,200.