North West Shelf partners sign for LNG sale

Partners in Australia's largest resource development, the North West Shelf Venture, have signed a Letter of Intent (LOI) with Tohoku Electric for the sale and purchase of liquefied natural gas (LNG) from the North West Shelf (NWS) in Western Australia.

The agreement signed by the six NWS LNG Sellers covers the supply of 0.4 million tons of LNG per annum (mtpa) for a long-term period starting in April 2005.

NWS Venture partner BHP called the agreement a further important step in the finalization of the planned $2.4 billion expansion of the North West Shelf LNG Project covering liquefaction facilities and a 42-inch trunkline.

BHP Petroleum President, Philip Aiken added, "The agreement is especially pleasing since Tohoku Electric is the first new long-term LNG customer since the inception of the North West Shelf Project in 1989."

The parties will now move to finalize a sale and purchase agreement by mid 2001.

The LOI with Tohoku Electric follows the signing over recent months of LOIs between the NWS LNG Sellers and Tokyo Gas, Toho Gas, and Osaka Gas of Japan.

It is anticipated that further LOIs will be signed with several other customers in the coming months. Approval of a final investment decision for a fourth LNG train, with a capacity of up to 4.2 million tons per annum, will be sought in the first part of calendar year 2001.

The North West Shelf Venture partners include: Woodside Energy (operator - 16.67%), BHP (16.67%); BP Developments Australia (16.67%); Chevron Australia (16.67%); Japan Australia LNG (MIMI) (16.67%); and Shell Development (16.67%).

Edited by Frederick Parnell, Houston