US energy giant Chevron Corp yesterday said that it would supply additional liquefied natural gas (LNG) to Japan's Tokyo Electric Power Co (TEPCO) as well as a 10 per cent of its stake in the Wheatstone liquefied natural gas project.

Under additional binding agreements signed yesterday, the San Ramon, California-based energy company will supply TEPCO with additional 400,000 tonnes per annum (MTPA) of LNG from its Wheatstone Project in Western Australia, for up to 20 years.

Tokyo-based TEPCO will also acquire a 10-per cent stake in Chevron's Wheatstone field licenses and an 8 per cent stake in Wheatstone natural gas processing facilities.

The two companies did not reveal the financial value for the agreements.

These agreements, and the previously announced sales and purchase agreement, increases TEPCO's total Wheatstone LNG offtake to 4.2 MTPA.

Chevron said that Tokyo Electric increased its long-term contract for liquefied natural gas by 400,000 million tons per year, or nearly 11 per cent, from Chevron's Wheatstone natural gas project.

In addition, Tokyo Electric will buy a 10-per cent stake in Chevron's Wheatstone field licenses and an 8 per cent stake in Wheatstone natural gas processing facilities.

Chevron's $29 billion Wheatstone project is expected to begin exporting LNG in 2016.

Chevron Australia managing director Roy Krzywosinsk said that following the additional offtake from TEPCO, more than 80 per cent of its share from Wheatstone has now been covered under long-term off-take agreements.

Back in 2009, TEPCO had agreed to acquire a 15-per cent stake in Chevron's Wheatstone gas field and 11.25-per cent interest in its LNG processing facilities near Onslow in Western Australia.

TEPCO had also agreed to buy 4.1 million tones MTPA of LNG from the Wheatstone project for a period of 20 years through a landmark deal valued at around $90 billion. (See: Chevron signs $90 billion gas deal with Tokyo Electric Power).

The Wheatstone project with an initial capacity of 8.9 mtpa is under development and the first LNG cargo from the plant is expected to sail in 2016.

Wheatstone is Chevron's second major Australian LNG project, after the A$43 billion Gorgon development offshore Western Australia.

Chevron, which is the lead operator in the Wheatstone natural gas project, has signed billions of dollars of LNG supply deals with Japanese and South Korean companies since mid 2009.

The Wheatstone Project will become one of Australia's largest resource projects. Located at Ashburton North, 7.5 miles west of Onslow in Western Australia, the foundation phase of the project will consist of two liquefied natural gas trains with a combined capacity of 8.9 MTPA and a domestic gas plant.

Chevron Australia leads the development of the Gorgon and Wheatstone natural gas projects; manages its equal one-sixth interest in the North West Shelf Venture; and operates Australia's largest onshore oilfield on Barrow Island and the Thevenard Island oilfields.

In the wake of last year's devastating tsunami and the nuclear disaster in TEPCO's Fukushima-Daiichi power plant, the struggling Japanese utility has become increasingly reliant on thermal power and cleaner fuels, as the company has shut down all its nuclear reactors.

The Japanese government took control of the beleaguered utility giant by agreeing to pump in 1 trillion ($12.5 billion), effectively saving the company from sliding into bankruptcy.

In May, another Japanese utility Tohoku Electric had tied up a $15-billion deal with Chevron for 1MPTA of Wheatstone LNG for a period of 20 years. It is believed that the Japanese government will own 42-per cent stake in a special purpose company that will acquire the Wheatstone stake. TEPCO will take 8-per cent interest, and Mitsubishi and Nippon Yuson will hold around 40 per cent and 10 per cent stakes respectively.

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(Originally published June 19, 2012, by domain-b.)