PERTH, Australia, April 19 (UPI) -- The Australian subsidiary of Chevron said it reached a deal to sell a good portion of the gas from its Wheatstone project to an area customer starting in 2020.
Alinta Energy in Western Australia, a U.S. owned entity, starts taking on about 25 percent of the gas produced from the Chevron project in a deal outlined Tuesday.
"This agreement is an important step in Chevron's rapidly expanding domestic gas business in Western Australia and the establishment of our leading domestic gas portfolio across the Wheatstone, Gorgon and North West Shelf projects," Chevron's regional manager Roy Krzywosinski said in a statement.
Chevron already supplies the area with about 10 percent of its natural gas. Wheatstone should build on the company's footprint when it starts servicing the domestic Australian market by 2018.
The deal with Alinta lasts through 2027. CEO Jeff Dimery said in a statement the agreement "provides long-term certainty for Alinta's gas portfolio and a firm foundation for Alinta's future gas supply to the West Australian market."
Chevron, which has headquarters in California, is positioned as a major player in the region, shipping the first delivery of liquefied natural gas from its multi-billion dollar Gorgon about a month ago with a shipment to Japanese company Chubu Electric Power. A mechanical issue in early April, however, forced a brief shutdown at the facility, which was a setback for Chevron after it reported a loss of $588 million for the fourth quarter.
It was its first loss in more than 10 years and follows a workforce reduction in 2015 of around 2 percent.