With the expansion of Asian economies, and especially as a result of Japan shutting down its nuclear industry, demand for fossil fuels is high in the East.
The $29 billion Wheatstone natural gas project just off the coast of Western Australia is perfectly positioned to take advantage of this high demand. The project, owned by Chevron Australia (72.14%), Apache Corporation (13%), Kuwait Foreign Petroleum Exploration Company (7%), Royal Dutch Shell (6.4%), and Kyushu Electric (1.46%), consists of a domestic gas plant and two liquefied natural gas trains with a combined capacity of 8.9 mtpa.
Chevron Australia, a subsidiary of the Chevron Corporation, has just signed a deal with Japan’s Tohoku Electric Power Company for the supply of one million tonnes of LNG each year from Wheatstone. According to the deal, Chevron and the other partners at Wheatstone will deliver gas to Tohoku for the next 20 years with the first delivery set for 2016, at an estimated value of $15 billion.
Roy Krzywosinski, the managing director of Chevron Australia, said that with this deal more than80% of the company’s share of LNG from Wheatstone is pledged to long term contracts with Asian customers. “This off-take agreement for Wheatstone demonstrates our Australian LNG projects are in the right geographic location at the right time to meet Asia's rapidly growing demand for cleaner burning natural gas.”
Wheatstone has also signed long term deals to supply LNG to Tokyo Electric Power, Kyushu Electric Power, and Chubu Electric Power.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com