CANBERRA (Commodity Online): Chevron Australia has inked a pact with Apache Energy and Kuwait Foreign Petroleum Exploration Co. (Kufpec) for the supply of natural gas to the proposed Wheatstone LNG project in Western Australia.

The gas will be sourced from Julimar and nearby Brunello fields owned by Apache Energy and Kufpec to Wheatstone LNG. As per the agreement, Apache and Kufpec would get a minor representative stake of 16.25% and 8.7% interest respectively in the Wheatstone LNG project.

Chevron will retain a 75% stake in the project. The deal means Wheatstone is the first LNG project in Australia to attract large volumes of third-party gas supplies.

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It will also extend the life of Wheatstone as it will unlock 2.1 tcf of gas reserves at Julimar and Brunello and generate a steady production for 15 years.

Apaches says the likely net capital expenditure for its part of the project will be $1.2 billion for the upstream development of its two fields which lie in permit WA-356-P plus $2.9 billion for its share of the Wheatstone facilities, including the LNG plant.

First phase of Wheatstone development is planned as a two-train LNG facility capable of producing 8.6 million tonnes/year of LNG along with pipeline gas from a domestic gas plant. A final investment decision is expected in 2011.