Chevron's Wheatstone Project Clears Hurdle

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Chevron, the second-largest U.S. oil company, moved another step closer to securing final environmental approval for its massive $25 billion Wheatstone liquefied natural gas project in Australia after Western Australia's Environmental Protection Agency endorsed conditional approval.

Off the coast of Northwest Australia, the project is expected to receive final investment approval from Chevron in the second half of this year. Wheatsone will eventually produce 25 million tons of liquefied natural gas per year, primarily for export, Reuters reported. Soaring demand for cleaner-burning fuels from Asia's emerging economies has prompted Western oil majors to invest heavily in Australia's LNG reserves.

Chevron (CVX) still needs to clear a few more regulatory hurdles before production at Wheatstone can commence. With Wheatstone and the $38 billion Gorgon field, Chevron is angling to become one of Australia's top LNG producers.

Royal Dutch Shell (RDS-A), Europe's largest oil company, and Apache (APA), the largest U.S. independent oil and natural gas producer, are among Chevron's partners on the Wheatstone project. Chevron has already signed agreements with Japanese power producers to ship LNG from Wheatstone to Japan, Reuters reported.