Advanced Search

Share Coverage



Category: Oil and Gas

Chevron signs gas deal with Alinta Energy

Tuesday, 19 Apr 2016 10:53:40 | Erin Parke

The deal was signed by Chevron's Roy Krzywosinski and Alinta Energy's Jeff Dimery. (Supplied: Chevron)

Chevron has signed a domestic gas agreement to supply Alinta Energy with natural gas from its Wheatstone Project in WA's Pilbara.

The oil and gas giant is building the project near Onslow.

At full capacity the plant will have the ability to supply WA's domestic market with 200 terajoules of gas a day, with the Alinta contract accounting for about a quarter of that.

The gas will be supplied via the Dampier to Bunbury pipeline.

Wheatstone is expected to start delivering gas to the WA market in 2018, with Alinta's seven-year contract with Chevron beginning in 2020.

Industry analyst Peter Strachan described the announcement as good news for Alinta and consumers.

Mr Strachan said Alinta learned the importance of sourcing gas from multiple suppliers after the 2008 Varanus Island explosion.

"Customers remember that and they want to maintain a diverse source of gas supply, and from Alinta's point of view, to have gas coming from different projects is going to reduce the risk of them failing to supply," he said.

Mr Strachan said Chevron had an obligation to supply gas to WA, which worked well for all parties.

"In line with other offshore projects, [Chevron] has a requirement to put 15 per cent of the resources into the domestic market," he said.

"In the current climate for liquefied natural gas overseas, it's probably a very good backstop for them because the current spot price for LNG in Asia is $4 a gigajoule and contract prices are going through at $6 a gigajoule.

"Really by the time you turn that gas from Wheatstone into LNG and get it to a customer, it's going to really cost you $8 or $9 a gigajoule, so to take the natural gas and put it into Alinta for its customers is probably a more profitable outlet for the gas in the current oil and gas global price environment."

Chevron currently supplies 10 per cent of WA's gas market via its North West Shelf Project.

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend