Chevron has signed a deal to supply liquefied natural gas (LNG) to a Korean Gas company from its Wheatstone project off the Pilbara in Australia's North West.
The Korea Gas Corporation (KOGAS) will purchase 1.5 million tonnes of LNG per year for up to 20 years. KOGAS will also be allowed to acquire a 5 % interest in Chevron's Wheatstone field licenses and domestic gas processing facilities. KOGAS is the world's largest importer of liquefied natural gas.
Chevron is the second largest oil company in the US and the operator of the Wheatstone Project, holding approximately 75 percent interest in the project. Wheatstone was discovered in August 2004 and in March 2008 Chevron announced their intention to develop the resource. Wheatstone is located about 200km (124 miles) north of Onslow off Western Australia's Pilbara coast.
Chevron is yet to take a final decision on developing Wheatstone but the Korean Gas deal will add momentum to the project. A final decision on Wheatstone will be taken in 2011.
It is estimated by Mark Greenwood, a Sydney based analyst for Citigroup that KOGAS will be short of gas in 2015 -2016. He says he wouldn't be surprised if they signed a couple of more Australian LNG projects.