Chevron inks $18 billion LNG supply deal with Kyushu Electric

In its fourth deal with Japanese energy companies to supply LNG, Chevron Corporation has signed multiple deals worth $18 billion with Kyushu Electric Power Co., Inc. for supplying liquefied natural gas (LNG) this week from the Chevron-operated Gorgon and Wheatstone natural gas projects.

Under the deal signed between Chevron's Australian subsidiaries and Kyushu Electric, Chevron will supply 3 million tons per annum (mtpa) of LNG from the $43 billion Gorgon Project for 15 years.

Chevron will also supply to the Fukuoka, Japan-based Kyushu Electric 7 mtpa of LNG from the Wheatstone Project for up to 20 years and Kyushu Electric will acquire 1.83 per cent of Chevron's equity share in the Wheatstone field licenses.

The Wheatstone project entered the front end engineering and design phase in July 2009 and Chevron, which is the operator and holds an approximate 75 per cent interest, expects to make a final investment decision in 2011.

The initial phase of the project plans to have the capacity to process 8.6 mtpa of LNG and a domestic gas plant.

Construction of the Gorgon Project began in the second half of 2009, with first gas planned for 2014. The initial project includes a 15 mtpa LNG facility and a domestic gas plant in north-western Australia. Chevron is the operator and has an approximate 47 per cent interest in the project.