PERTH (miningweekly.com) – US energy major Chevron has sold a further stake in its $29-billion Wheatstone liquefied natural gas (LNG) project, and signed another supply deal with Japan’s Tokyo Electric Power Company (Tepco) and its partners.
The deal was estimated to be worth some $4-billion.
A consortium consisting of Tepco, Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha has established a special purpose vehicle to acquire a 10% participating interest in the Wheatstone field licence, and an 8% interest in the Wheatstone natural gas facilities.
Tepco would purchase some 0.7-million tons a year of LNG from the consortium vehicle, and has signed a separate agreement with Chevron to purchase an additional 0.4-million tons a year of LNG.
The additional agreements would allow Tepco to procure a total of 4.2-million tons a year of LNG from the Wheatstone project, over 20 years.
Chevron Australia MD Roy Krzywosinski said that more than 80% of Chevron's equity LNG from Wheatstone was now covered under long-term offtake agreements with customers in Asia.
“These agreements continue to demonstrate Wheatstone is well placed geographically to meet the Asia Pacific region's demand for a safe, reliable and cleaner-burning source of energy.”
Mitsubishi said in a statement that with competition increasing globally to secure energy resources, with natural gas in growing demand as a clean energy resource, the agreement with Chevron had “profound meaning” as a move by Japanese energy-related companies to secure energy resources with government support.
It added that the Wheatstone project would be an important supply source for Japan in securing stable LNG supplies in view of the low construction and operational risk, since the project was operated by Chevron in a geopolitically advantageous country.
The Wheatstone project will become one of Australia's largest resource projects, with the foundation phase of the project consisting of two LNG trains with a combined capacity of 8.9-million tons a year and a domestic gas plant.