Chevron sells more domestic gas to Alcoa in Australia

Chevron has signed an agreement to supply a further 37PJ (962mn m³) of gas sourced from the three LNG projects located offshore Western Australia (WA) to US aluminium group Alcoa's alumina refineries in the southwest part of the state, adding to an existing contract with Alcoa for 64PJ of gas.

The Chevron gas supply contract is one of three sales and purchase (SPA) agreements that Alcoa has signed with gas producers. Alcoa has signed three new gas SPAs, which together will supply 198PJ of gas to its WA alumina refineries, starting from 2024.

The agreements with Chevron, ExxonMobil and Australian independent Warrego Energy, coupled with existing gas contracts, will supply Alcoa's three refining operations in WA over a 10-year period, Alcoa said. The Alcoa gas deals follow the agreements signed in December 2018.

The gas from Chevron will be sourced from the three LNG projects in WA in which the US major has an interest, including the 15.6mn t/yr Gorgon LNG facility, the 8.9mn t/yr Wheatstone LNG venture and its sixth share in the 16.3mn t/yr North West Shelf (NWS) LNG plant operated by Australian independent Woodside Petroleum.

Warrego signed a binding gas sales agreement (GSA) with Alcoa for the long-term supply of a total of 155PJ of natural gas from the West Erregulla onshore gas field in WA, Warrego said.

The agreement will start on 1 January 2024, subject to a positive final investment decision (FID) by Warrego expected in the first half of 2021, it said. The size and term of the GSA with Alcoa is such that Warrego does not need to secure additional GSAs to support the FID, it said. This foundation contract with Alcoa will underpin gas-processing development and provide the foundation for Warrego to plan additional phases of development, the firm said.

The West Erregulla field is jointly owned by Warrego and Australian independent Strike Energy. The field has been earmarked to provide backfill gas to the NWS LNG venture. ExxonMobil's largest gas interest in WA is its 25pc stake in the Gorgon LNG venture.

By Kevin Morrison