Japan to invest $4.4 bn in Chevron LNG project
17 May 2012
A Japanese consortium comprising utility giant Tokyo Electric Power Company Ltd (Tepco), state-controlled Japan Oil, Gas and Metals National Corp, multinational conglomerate Mitsubishi and shipping giant Nippon Yusen KK is reported to be in talks to acquire a ¥350 billion ($4.4-billion) stake in the US oil and gas major Chevron's Wheatstone liquefied natural gas (LNG) project in Pilbara region of Western Australia, Bloomberg Business Week reported citing a Tepco spokesman.
According to a Nikkei report, the Japanese government has teamed up with the public-private consortium for the venture. It is believed that the consortium is interested in acquiring a 10-per cent stake in the gas field development and 8-per cent stake in the LNG processing facilities.
Back in 2009, Tepco had agreed to acquire a 15-per cent stake in Chevron's Wheatstone gas field and 11.25-per cent interest in its LNG processing facilities near Onslow in Western Australia.
Tepco had also agreed to buy 4.1 million tones per annum (mtpa) of LNG from the Wheatstone project for a period of 20 years through a landmark deal valued at around $90 billion. (See: Chevron signs $90 billion gas deal with Tokyo Electric Power)
The $29-billion Wheatstone project with an initial capacity of 8.9 mtpa is under development and the first LNG cargo from the plant is expected to sail in 2016.
In the wake of last year's devastating tsunami and the nuclear disaster in Tepco's Fukushima-Daiichi power plant, the struggling Japanese utility has become increasingly reliant on thermal power and cleaner fuels, as the company has shut down all its nuclear reactors.