Japan's Chubu Electric Agrees to Buy Western Australian LNG from Woodside

Researched by Industrial Info Resources Australia (Perth, Australia)--Woodside Petroleum (ASX:WPL) (Perth, Australia) will supply Chubu Electric Power (TYO:9502) (Tokyo, Japan) with 1.5 million metric tonnes of liquefied natural gas (LNG) for a period of three years, starting in April 2014.

The LNG will be sourced primarily from Woodside's Pluto LNG Production Plant, which is on the Burrup Peninsula in Western Australia. Natural gas is sourced 190 kilometres (118 miles) off the Western Australian coast in the Carnarvon Basin. The agreement with Chubu will help result in most of Pluto's uncontracted LNG being sold, with 3.75 million metric tonnes per annum now committed from the 4.3 million-metric-tonne-per-annum maximum capacity plant.

Woodside operates Pluto and has a 90% equity share in the facility; Kansai Electric (TYO:9503) (Osaka, Japan) and Tokyo Gas (TYO:9531) each have a 5% share. The Pluto LNG Plant has been operational since March 2012. The LNG facility will expand beyond its single production train after Woodside has firmed up more natural gas, or after Woodside makes an agreement with a third party to buy natural gas from nearby fields for processing and marketing via Pluto. Woodside also will need to contract more LNG to the international marketplace.

Chubu Electric has been purchasing LNG from Woodside, via its North West Shelf operations on the Burrup Peninsula, since 2009. Newer agreements have been signed with Woodside to purchase LNG from Gorgon once it is operational in 2015, and for Wheatstone LNG from 2017.

Japanese energy companies are still buying large amounts of LNG from Australia. Oceania's biggest customers for LNG are energy companies in Korea, China and Japan.

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