Chevron Corp., the second-largest U.S. oil company, said it sold more than 80 percent of the gas from its Wheatstone project in Western Australia after reaching an agreement with Tohoku Electric Power Co. as Japan deals with its departure from atomic power.
The electricity supplier will buy as much as 1 million tons of liquefied natural gas per year under a 20-year agreement, Roy Krzywosinski, managing director of Chevron's Australian unit, said Saturday in Adelaide. Wheatstone is off to a "flying start," Krzywosinski said. "The Asian LNG market is certainly growing and we continue to see demand."
Chevron decided in September to go ahead with the 29 billion Australian dollar ($29 billion) Wheatstone project, with the first shipment of the fuel scheduled to be transported in 2016. The venture, along with the company's A$43 billion ($43 billion) Gorgon project, are among seven LNG developments under way in the country to meet rising Asian demand for the fuel. San Ramon, California-based Chevron has said that Gorgon and Wheatstone are at the center of its global expansion plans.
Thirteen out of 14 wells drilled in Australia since 2009 have been successful, adding resources to underpin potential LNG plant expansions, Chevron said in March.
Chevron said in April it signed an accord with Chubu Electric Power Co. to buy gas from Wheatstone. Shipments are scheduled to begin in 2016, with the project initially producing 8.9 million tons of LNG a year from two processing units.