Chevron inks $15-bn LNG deal with Japan's Tohoku Electric

Chevron Australia Pty Ltd, a subsidiary of global oil and gas giant Chevron Corporation has signed a long-term agreement yesterday with Japanese utility Tohoku Electric Power Co for the supply of one million tonnes per annum (mtpa) of liquefied natural gas (LNG) from its Wheatstone project in Pilbara coast of Western Australia.

The non-binding deal with Tohoku envisages supply of LNG for a period of 20 years, Chevron Australia's managing director Roy Krzywosinski told reporters in Adelaide Sunday.

Although value of the contract has not been disclosed, it is believed to be worth at least $15 billion.

Krzywosinski said that with the signing of the agreement with Tohoku, Chevron has tied up around 80 per cent of LNG production from its Wheatstone project with Asian buyers.

Other long-term LNG customers from Wheatstone project include Japanese utilities Tokyo Electric Power Co (Tepco), Kyushu Electric Power Co and Chubu Electric Power Co (Chubu). Tepco agreed to buy 3.1mtpa of LNG for a period of 20 years, Kyushu 0.7mtpa, and Chubu will take 1 mtpa.

San Ramon, California-based Chevron is the largest holder of natural gas resources in Australia, and leads two mega LNG projects.