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Chevron signs supply purchase agreement with Kyushu Electric

Oilfield Technology,

Chevron has signed a Sale and Purchase Agreement (SPA) with Kyushu Electric Power Co. for the delivery of LNG from the Wheatstone Project in Western Australia.  As part of the deal Kyushu Electric will also acquire equity in the Wheatstone gas fields and processing plant.

Under the binding agreement, Chevron, together with Apache and Kufpec, will deliver up to 0.7 million tpa of LNG to Kyushu Electric for up to 20 years.

Kyushu Electric will also acquire 1.83% of Chevron’s equity share in the Wheatstone field licenses and a 1.46% interest in the Wheatstone natural gas processing facilities to be developed onshore near Onslow. Including the equity participation volume, Kyushu Electric will take delivery of 0.8 million tpa of LNG from the Wheatstone Project.

John Gass, president, Chevron Gas and Midstream, said, “We are pleased to build on our relationship with Kyushu Electric as a long term customer of the North West Shelf Venture and, more recently, as a customer of the Chevron-operated Gorgon Project. This SPA is an important milestone as we progress towards a final investment decision in 2011.”

The Chevron-operated Wheatstone Project will become one of Australia's largest resource projects. Located at Ashburton North, 7.5 miles (12 km) west of Onslow in Western Australia, the foundation phase of the project will consist of two liquefied natural gas trains with a combined capacity of 8.9 million tpa and a domestic gas plant.

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