Apache Corporation (NYSE, Nasdaq: APA) on Tuesday announced that an Apache Australian subsidiary and its partners have agreed to sell liquefied natural gas (LNG) from the Chevron-operated Wheatstone Project in Western Australia to Chubu Electric Power Company Incorporated (Chubu).
The Wheatstone partners and Chubu signed a heads of agreement to supply 1 million metric tons per annum (MTpa) of LNG for up to 20 years. Through its 13-percent share in Wheatstone, Apache Julimar Pty Ltd, an Apache subsidiary, will supply 0.13 MTpa to Chubu, or approximately 19 million cubic feet of natural gas per day.
Wheatstone, one of Australia's largest resource projects, is under development at Ashburton North, 7 miles (12 kilometers) west of Onslow in Western Australia. The foundation phase of the project will include two LNG trains with a combined capacity of 8.9 MTpa and a domestic gas plant.
Apache Julimar Pty Ltd and KUFPEC Australia (Julimar) Pty Ltd, a subsidiary of Kuwait Foreign Petroleum Co., will supply gas produced from the Julimar and Brunello fields, large gas accumulations discovered in 2007. Apache has a 65-percent interest in the upstream Julimar Development Project and is the operator.
The heads of agreement is subject to completion of a binding LNG sales agreement. The Wheatstone partners earlier announced long-term agreements to sell LNG to Tokyo Electric Power and Kyushu Electric Power.
"Apache is pleased to announce this agreement with Chubu; it is an important milestone for the Wheatstone project and another indication of continued strong demand for LNG in Asia," said Janine McArdle, Apache's senior vice president of gas monetization.