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ChevronTexaco plans offshore LNG Terminal in Baja California

Posted: 30 October 2003

Project enhances ChevronTexaco's global gas strategy

Major Contracts Awarded for Port Pelican and Baja California Projects

ChevronTexaco Corp announced plans to construct an estimated (US) $650 million offshore liquefied natural gas (LNG) receiving and regasification terminal, to be located approximately 8 miles (13 kilometers) off the coast of Baja California, Mexico. ChevronTexaco is working with Mexican authorities to secure permit approvals for the project.

The proposed offshore LNG terminal will be constructed using a Gravity Based Structure (GBS), a freestanding concrete structure, along with mechanical facilities capable of offloading, storage and regasifying LNG. The terminal will be designed to process 1,400 million standard cubic feet of gas per day, with initial processing of approximately 700 million standard cubic feet of gas per day.

John Gass, President of ChevronTexaco Global Gas, said, "Growing demand for natural gas in North America is widely projected to outstrip current supply capabilities. We believe ChevronTexaco's proposed Baja California offshore LNG project will help fuel the development of a sustainable, future energy plan for Mexico and the United States and play an important part in meeting this demand."

ChevronTexaco has filed permit applications with Mexico's Comision Reguladora de Energia (CRE) and to SEMARNAT, Mexico's Environmental Authority, for the offshore terminal. The company has also requested from Secretaria de Comunicaciones y Transportes (SCT) the right to construct and operate the GBS in Mexico's federal waters. Upon receipt of all required approvals by Mexico's federal, state and municipal authorities, ChevronTexaco anticipates beginning construction of the GBS in Baja California in 2004. Commissioning and startup are projected for the fourth quarter of 2007.

Baja California project enhances ChevronTexaco's Global Gas Strategy
ChevronTexaco's strategic plan includes a focus on building an integrated, global natural gas business. This strategy plays a key role in commercializing ChevronTexaco's existing natural gas resource base and will enable the development of new natural gas growth opportunities worldwide.

Gass continued, "The Baja California proposal will allow the company to commercialize natural gas resources, such as the world-class Gorgon gas field in Australia, by providing access to meet the growing demand for natural gas in North America."

In August, ChevronTexaco Corp. announced that it had signed a Memorandum of Understanding (MOU) with the Gorgon Joint Venture, an offshore natural gas project in Australia of which ChevronTexaco is a partner, for the supply of approximately 2 million tonnes of LNG annually for delivery to North America over a 20-year period.

ChevronTexaco's global gas strategy incorporates large gas field developments, such as the greater Gorgon-area in Australia and Plataforma Deltana in Venezuela; a proposed LNG project in Angola and the recently announced Brass LNG project in Nigeria; gas-to-liquids projects through its Sasol Chevron joint venture; and proposed offshore regasification projects, including Baja California in Mexico and the Gulf of Mexico in the U.S.

Additional LNG terminal projects are also under consideration for potential installation in California.

The company's project in the Gulf of Mexico, referred to as "Port Pelican," is an offshore regasification terminal proposed for installation offshore Louisiana and is also to be constructed using a GBS. The project is currently undergoing permit review by U.S. government authorities and a decision is anticipated before the year end.

The recent National Petroleum Council study, commissioned by U.S. Secretary of Energy Spencer Abraham, projected LNG imports into North America would grow from 1.4 billion cubic feet per day (Bcfd) in 2003 to 8.5 Bcfd by 2015. The Baja California and Port Pelican LNG regasification terminals will help to facilitate these imports and help meet North America's growing demand for natural gas.

Major contracts awarded for Port Pelican and Baja California projects
ChevronTexaco has awarded major contracts to Aker Kvaerner and Fluor, for front-end engineering design (FEED) and to perform engineering, procurement and construction management (EPCm) for its Port Pelican and Baja California offshore LNG terminals. The construction contract is expected to be awarded in the first half of 2004.

Aker Kvaerner, a recognized world leader in GBS technology with over 30 years of experience in GBS design and construction for the oil and gas industry, has been awarded the GBS contract.

Fluor's scope includes the EPCm for all platform topsides equipment, related utilities and support equipment as well as overall program management. A portion of the topsides engineering work will be performed through a subcontract to ICA Fluor, a Fluor affiliate in Mexico City.

Based in San Ramon, Calif., ChevronTexaco is the second-largest U.S.-based energy company and the fifth largest in the world, based on market capitalization. More than 53,000 ChevronTexaco employees work in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and marketing and distributing fuels and other energy products.

For more information see www.chevrontexaco.com.

Posted by Richard Price, Editor Pipeline Magazine

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