Japanese group acquires stake in Australian LNG project | WPN World People News

A Japanese government backed consortium has bought a $4 billion-plus equity stake in the Wheatstone liquefied natural gas project in Western Australia and committed to source additional 400,000 tonnes a year of LNG for up to 20 years as part of the deal.

Under the deal signed late Monday, the consortium which includes government-owned Japan Oil, Gas and Metals National Corporation (Jogmec), corporate giant Mitsubishi and shipping company Nippon Yusen - has agreed to acquire 10 per cent interest in the Wheatstone gasfields and 8 per cent of the processing facilities from project operator US energy giant Chevron.

In addition, Chevron along with partners Apache and Kufpec, have signed an agreement to supply 0.4 million tonnes per year (mtpa) of LNG from Wheatstone for up to 20 year in addition to the agreement for supply of 3.8 million tonnes of LNG annually signed last year.

The additional LNG deal means Tepco will buy almost 50 per cent of the Wheatstone project's initial output of 8.9 million tonnes of gas a year.

The $29 billion Wheatstone LNG plant is located off the coast of Western Australia and is expected to start exporting gas in 2016. US energy major has plans to enhance the Wheatstone production from the 8.9 mtpa under construction now to 25mtpa.

Chevron's other partners in the Wheatstone project are Apache Corporation, Kuwait Foreign Petroleum Exploration Company (KUFPEC), Royal Dutch Shell and Kyushu Electric.
Positioning itself to become one of the largest LNG producers in Australia, Chevron's $37 billion Gorgon project, also off Western Australia, is expected to start 15mtpa production by 2014.

Chevron has offtake agreements with several other Japanese utilities including Tohoku Electric and Chubu Electric for 1 mtpa each and Kyushu Electric for 0.46 mtpa.

Australia is expected to surpass Qatar as the top LNG exporter by the end of the decade, when it would have quadrupled its current production of about 20 mtpa.
Japanese media reported last month that Tepco and the Japanese government would hold stakes of 8 per cent and 42 per cent, respectively, in the company set up to acquire the Wheatstone stake.

Mitsubishi and Nippon Yusen will reportedly control about 40 per cent and 10 per cent, respectively.

The Japan Bank for International Co-operation is to provide about $2billion in loans, and private banks will lend $1.3bn, according to reports last month.

Japan, the world's biggest LNG buyer, relies heavily on natural gas for its energy since the Fukushima disaster, which led to shutdowns of its nuclear reactors due to safety fears.

At the weekend, Prime Minister Yoshihiko Noda issued approval for two reactors to be restarted.

Source: The Asia News.net