A multi-billion-dollar LNG supply deal has been signed between Chevron and Japan’s Tohoku Electric Power, underscoring the nation’s global search for energy sources as it sees unknown future of nuclear power.

Under the agreement, Chevron will supply Tohoku with 900,000 million tons/year of LNG produced at its Wheatstone project in Western Australia for a period of up to 20 years.

With an estimated capacity of 8.9 million tons/year, the $29 billion Wheatstone LNG project is still under construction and scheduled to produce the first shipments in 2016.

The long-term supply contract will bring 85% of Chevron’s future gas output at the Wheatstone project to Japan’s Tohoku.

The deal comes in the wake of an antinuclear movement in Japan where authorities have been urged to shut down nuclear reactors and switch to other energy sources after a tsunami-caused nuclear disaster occurred in Fukushima in March 2011.

“These agreements, combined with our ongoing exploration success, demonstrate that our Wheatstone and Gorgon projects in Australia are well placed to meet the growing demand for natural gas in the Asia-Pacific region,” said Roy Krzywosinski, the managing director of Chevron in Australia.

In March, Chevron and Japan reached another LNG supply agreement at the Wheatstone project, under which Chevron, together with its Wheatstone partners Apache Energy and Kuwait Foreign Petroleum Exploration Co., will ship 1 million ton/year of LNG to Japanese utility Chubu Electric Power Company Inc. for up to 20 years.

Chubu is already a partner and customer of Chevron’s $53 billion Gorgon LNG Project, also located in Western Australia.


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