Chevron’s Australia CEO has used his first major public address to urge the nation to emulate the US shale gas revolution to ensure both a reliable electricity supply and massive economic benefits.
Nigel Hearne said a looming energy crisis on the east coast could be averted through investment in new and existing oil and gas fields.
Mr Hearne, who led a US business unit in a shale region for Chevron before relocating to Perth in Western Australia last year, said the industry had turned the US from a net importer to net exporter of gas.
That had been achieved through a conducive regulatory regime and sufficient support from communities and property owners.
“There’s no reason why this can’t be replicated on Australian soil, and very quickly if we look at the US example,” he told a Committee for Economic Development of Australia breakfast.
“Australia has a real opportunity to transform the local energy market by unlocking undeveloped gas resources.”
Mr Hearne said communities, industry, manufacturing and the environment would benefit from such development.
The Chevron Australasia managing director’s first public speech since taking the role comes as the $54 billion Gorgon LNG project’s third train is about to start producing gas. The $34 billion Wheatstone first train is scheduled for first gas mid-year.
Barrow Island’s Gorgon has delivered 50 cargoes in the 12 months since production began.
Mr Hearne ruled out adding another train to Gorgon in the foreseeable future.
“I can’t see in the near term us investing in a fourth train at Gorgon or a third train at … Wheatstone. I need to start throwing some cash off to pay back the investment.
“The question is, can any train in WA find a competitive way to lower the cost of investment and remain competitive.”
He said Woodside’s plans to add a smaller second train at the Pluto LNG plant was “a different way to go”. But producers were focusing on assets that offered shorter-term returns.
He urged collaboration among industry players to tap an estimated 200 trillion cubic feet of offshore gas to keep LNG plants full.
“I’m not sure that collaboration has been front and centre in the last five to 10 years,” he said.
But it had been demonstrated in the “audacious” Gorgon and Wheatstone projects.
“Collaboration is a good thing with $50 (a barrel) oil, it’s an equally good thing at $70 oil or $100 oil. There’s value to be generated if we can get that right.
“Western Australia can lead the rest of the country in responsible development through strong partnership and collaboration.”
On the prospect of Chevron developing its assets in the Great Australian Bight in the wake of BP’s withdrawal, Mr Hearne said that depended on global portfolio decisions.
“Right now it fits, but it’s going to have a few things cleared out of the way before we actually decide whether it’s something that’s an opportunity for us.”