PERTH (miningweekly.com) – US major Chevron has reiterated that its decision to exit the Australian refining industry would have no impact on its focus to deliver big liquefied natural gas (LNG) projects in Western Australia.
Chevron, which sold its 50% stake in refiner Caltex Australia for A$4.7-billion on Friday, stated that it would continue to advance its Wheatstone and Gorgon LNG projects in Australia, explaining that its decision to exit Caltex Australia was motivated by a portfolio review aimed at generating cash to support its long-term priorities and was consistent with the company’s asset sales commitment.
“Asia-Pacific is a core strategic focus for Chevron’s downstream business and we remain focused on ensuring our operations, portfolio and investment are well positioned to meet the region’s growing demand for energy,” said Chevron’s president for international products, downstream and chemicals, Mark Nelson.
Chevron’s shares in Caltex Australia were sold to a number of Australian and global equity market institutional investors at A$35 a share.
The share price of ASX-listed Caltex Australia tumbled by about 9% on Monday in response to the sale, to trade at A$33.95 a share.
Caltex Australia has assured shareholders that the change in register would not affect the company’s business activities, or the company’s ability to deliver product to its customers.
Caltex Australia MD and CEO Julian Segal said the sales price reflected the strong interest in the stock.
“The success of the sale is also a strong endorsement of our strategy, which we have delivered to date, and which remains unchanged,” Segal said.
“Caltex Australia is a leader in transport fuels and we remain committed to delivering top quartile shareholder returns. We retain an unyielding commitment to serving our customers with safe and reliable supply.”
Caltex Australia shares were trading at a low of A$33.95 a share on Monday, down from a high of A$35 a share.
Chevron’s Wheatstone project is located 12 km west of Onslow and will consist of two LNG trains with a combined capacity of 8.9-million tonnes a year, along with a domestic gas plant. The project is about 49% completed, and first LNG from Wheatstone is expected in late 2016.
The $52-billion Gorgon project includes the construction of a three-train 15.6-million-tonne-a-year LNG plant on Barrow Island with the capacity to supply 275-million standard cubic feet a day of natural gas to the Western Australian market. The project is more than 90% complete and first gas from the system is planned for mid-2015.