The $29 billion Wheatstone LNG (liquefied natural gas) project of US giant Chevron Corp. is almost already a good done deal, with 80 per cent of sale contracts already covered.
Logo of Chevron
On Sunday, Roy Krzywosinski, managing director of Chevron Australia, said the company had entered into a non-binding agreement with Japanese utility firm Tohoku Electric Power for the supply of 1 million tonnes of gas annually for 20 years. Tohoku Electric Power is the fourth Japanese buyer of US giant Chevron Corp.'s Wheatstone LNG.
"This provides further momentum for the Wheatstone project," Mr Krzywosinski said at an oil and gas conference in Adelaide on Sunday.
Wheatstone, expected to start production in 2016, is located 12km west of Onslow on the Pilbara coast. It is held 72.14 per cent by Chevron, 13 per cent by Apache, and the remainder by Kuwait Foreign Petroleum Exploration, Shell and Japan's Kyushu Electric.
Japan, which recently had shut down the last of its 50 nuclear reactors, is on the race to secure alternative solutions to support its energy requirements. The LNG deal stands as a testament to its desire to accommodate an essentially more mixed-up energy grid. The use of nuclear energy in Japan faced its worst battle after the March 2011 earthquake and tsunami triggered a massive meltdown of the Fukushima nuclear reactors.
Tohoku is one of several Asian utilities to buy supplies from Wheatstone, Reuters News reported. Others included Chubu Electric Power, Tokyo Electric Power Company and Kyushu Electric.
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