North West Shelf Australia LNG Announces New Agreement to Supply LNG to Chugoku Electric Company

Deputy Prime Minister and Minister for Trade, Mark Vaile, today welcomed the announcement by North West Shelf Australia LNG (NWS ALNG) that it had reached agreement to sell up to 1.4 million tonnes of LNG per year to Japanese utility Chugoku Electric Power Company.

The deal is a 12 year contract that commences in 2009. The Japanese utility is one of the venture’s foundation customers with the original agreement signed in 1985 to purchase 1 million tonnes of LNG per year.

“I congratulate NWS ALNG on re-signing its sale agreement with Chugoku Electric. The decision by Chugoku Electric is a clear vote of confidence by a major Japanese utility in the venture. It is further proof of Australia’s reputation in Japan and internationally as a reliable and long term supplier of LNG,” Mr Vaile said.

“It is symbolic of the long-standing commitment by Japanese companies to close collaboration in Australia’s LNG industry.

“With Australia’s LNG industry continuing to fulfil its potential, the success of the NWS Australian LNG-Chugoku Electric relationship over the past 20 years is an important milestone for both the NWS venture and for Australia’s LNG industry.”

“Australia’s position as a major supplier of energy resources to Japan dates back 50 years now and is based on the excellent political and trade relationship we enjoy with Japan. The re-signing of the NWS-Chugoku Electric deal underlines this relationship, as well as the benefits of further integration that will flow from a bilateral free trade agreement with Japan,” Mr Vaile said.

LNG is Australia’s second-largest export to Japan, with exports to Japan in 2005 worth up to $4 billion. The North West Shelf gas project is Australia’s biggest resource development. It commenced production in 1989 and until 2006 was Australia’s only LNG venture in production. Over the past year large scale agreements with Japanese buyers have also been concluded by the Pluto and Gorgon LNG projects.

Contact: Mr Vaile's Office 02 6277 7420, Departmental 02 6261 1555