Chevron signs $90 billion gas deal with Tokyo Electric Power

In a historic energy deal, Chevron Corporation, one of the world's largest integrated energy companies, has entered into a preliminary agreement with Japan's largest utility Tokyo Electric Power Company (TEPCO) to supply 4.1 million tonnes per annum (MTPA) of Liquefied Natural Gas (LNG) from its Wheatstone project in northwestern Australia. (See: Chevron inks $60 billion gas deal with Japan and South Korea)

The deal signed between Chevron's subsidiary, Chevron Australia Pty Ltd and TEPCO, provides for up to 20 years of LNG supply for a contract value of around A$90 billion ($82 billion), though financial details of the deal have not been disclosed.

Under the terms, TEPCO would also acquire 15 per cent of Chevron's equity share in the Wheatstone field licenses off the Western Australian coast, and an 11.25 per cent interest in the Wheatstone natural gas processing facilities to be developed onshore near Onslow, about 1400km north of Perth in the Pilbara region, a statement said.

The contract covers nearly 50 per cent of the planned initial output of 8.6 MTPA at the Wheatstone plant. A final investment decision on the project is expected by next year.

Although Chevron did not disclose the commercial terms of the agreement, Western Australian Premier Colin Barnett, who welcomed the deal, said that the sales contract is worth $90 billion, which would make it the largest sales contract in Australian export industry.

It will also put Australia on track to becoming the second-largest LNG producer in the world by 2020, behind Qatar.