Chevron signs Wheatstone domestic gas deal with Alinta

Chevron Corp. has signed its first domestic gas supply deal for the $29-billion Wheatstone LNG domestic gas project offshore Western Australia with supplier Alinta Energy.

The agreement is for the delivery of 20 petajoules/year of gas for 7 years beginning in 2020.

The Wheatstone project is expected to be brought on stream for its two-train, 8.9 million tonne/year LNG phase by mid-2017. Domestic gas will be available for the Western Australian market from 2018.

At top capacity the Wheatstone domestic gas plant will produce 200 terajoules/day of gas, or about 10% of Western Australia’s current demand.

Alinta, which has been put up for sale by its private equity owner TPG Capital, currently draws the majority of its gas from the North West Shelf project, but these contracts are understood to finish in the next few years. Hence this recent deal is expected to provide long-term certainty for Alinta’s gas portfolio.

The Wheatstone JV includes Chevron as operator with 64.1%, Kuwait Foreign Petroleum Exploration Co. (Kufpec) 13.4%, and Woodside Petroleum Ltd. 13%.

Chevron is also supplying the Western Australian market from its Gorgon project on Barrow Island. Gorgon will produce 300 terajoules/day of gas supplied to energy retailer Synergy and generator Verve Energy.

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