Chevron signs up Australia’s Alinta to buy gas from Wheatstone LNG

4/19/2016

MELBOURNE, April 19 (Reuters) -- Chevron has agreed to sell 20 petajoules/year of gas from its Wheatstone project to Alinta Energy in Western Australia starting in 2020, securing a customer for more than a quarter of the domestic gas output from Wheatstone.

The contract, lined up at a tough time for producers looking to seal long-term deals amid a gas supply glut, is for seven years, Chevron said on Tuesday.

"This agreement is an important step in Chevron's rapidly expanding domestic gas business in Western Australia," Chevron Australia's managing director Roy Krzywosinksi said in a statement.

The $29-billion Wheatstone project is due to start producing LNG for export in 2017 and start supplying the Western Australian domestic market from 2018.

At full tilt, the project will have a capacity of 8.9 MMtpy of LNG and 200 terajoules/day of domestic gas, with the gas being marketed separately by each of the project partners.

Chevron has a 64% stake, with the remainder owned by Kuwait Foreign Petroleum Exploration Co. (KUFPEC), Woodside Petroleum and Japan's Kyushu Electric Power Co. and Tokyo Electric Power Co. (TEPCO).

Chevron already supplies about 10% of the Western Australian market with gas from its share of the competing North West Shelf project.

(Reporting by Sonali Paul; Editing by Ed Davies)