U.S.energy behemoth Chevron Corp. (CVX) is on course to advance the start-up of its $3.1-billion gas project in the Gulf of Thailand – Platong Gas II – to later this year, instead of 2012. Speaking at a ceremony to mark the completion of the facility’s main gas-processing platform, Jim Blackwell, President, Chevron Asia Pacific Exploration and Production, attributed the acceleration of Platong II’s progress to meet rising Thai demand, where gas consumption rose by 13% last year.

The shallow water Platong II development – located 120 miles (200 kilometers) offshore – is designed to process 420 million cubic feet of natural gas per day at its peak. Chevron has a 69.8% operating interest in the project, with the other partners – Japan’s Mitsui (27.4%) and Thailand’s state-owned oil and gas company PTT Exploration & Production (2.8%), with the later responsible for buying all the gas and selling it to customers.

Chevron’s efforts to speed up gas production from the Platong II project will not only help expand its footprint in Thailand (natural gas provides about a third of the nation’s electricity) but also cater to the company’s drive to cash in on the burgeoning demand for cleaner-burning fuels in Asia.

Chevron has been concentrating on natural gas projects in the region, where greenhouse gas emissions have prompted governments to encourage cleaner-burning fuels and reduce dependence on crude oil and coal.

It is also a part of Chevron’s long-term strategic plan to focus on growth in its gas business. In line with other supermajors, Chevron sees natural gas playing an important part in its future.

The company’s targeted volume growth (1% through 2014 and by 4 – 5% in the three years after that) will be achieved primarily by new natural gas projects. Chevron expects natural gas to represent 41% of total volumes by 2017, up from the current share of 31%.

San Ramon, California-based Chevron is the second-largest U.S. oil company by market value after ExxonMobil Corp. (XOM). It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.

Chevron shares currently retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.

 
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