AMERICAN energy giant Chevron has rejected overtures from Woodside for a joint development of their adjacent Wheatstone and Pluto liquefied natural gas projects in the Carnarvon Basin off the coast of Western Australia.

The clash between the two oil and gas heavyweights spilled over to the annual conference of the Australian Petroleum Production and Exploration Association.

Woodside’s managing director, Don Voelte, told the conference that construction of new LNG projects “all along the WA coast” did not make sense, given that billions of dollars worth of infrastructure was in operation (the Woodside-managed North West Shelf project) or under construction (Woodside’s $12 billion Pluto project) at Karratha.

Woodside wants Chevron to wrap its Wheatstone gas into its Pluto project. But Chevron’s managing director for Australia, Roy Krzywosinski, has other ideas.

He revealed at the conference that Chevron had plans for Wheatstone to underpin the development of a $30 billion LNG processing hub near Onslow, initially with two LNG processing trains but with the intention of eventually going to five trains using third-party gas.

“No matter what way you look at it, Wheatstone is a winner. We have enough (100 per cent owned) gas to underpin a multiple train development now,” Mr Krzywosinski said.

He said Chevron wanted to attract third-party gas that sits in the western Carnarvon Basin where it is not currently economic to take all the way to Karratha, home to the Pluto plant being built by Woodside.

“We’re in a position at Wheatstone to lower the economics for all of the gas that has been deemed uneconomic,” he said. “Once you start building the infrastructure, you start lowering the economic limit for other gas to enter the system.”

He said Chevron was planning to spend more than $US500 million ($618 million) on preliminary engineering studies. A final investment decision was expected in 2011.

“We’re not giving lip service here. We’ve got tangible plans in place,” Mr Krzywosinski said.

That remark was in response to Mr Voelte’s earlier suggestion that state and federal governments could intervene if companies were incapable of coming to sensible joint venture arrangements for LNG developments.