Chevron to supply gas to Newcrest in WA

Chevron to supply gas to Newcrest in WA

Chevron has added Newcrest Mining to its growing portfolio of domestic gas customers in Western Australia, providing another local outlet for gas from its new $US34 billion Wheatstone LNG project.

The deal for the supply of 16 petajoules of gas over three-and-a-half years follows a larger deal inked in July with South32’s Worsley Alumina venture. The US major said it is “actively marketing” domestic gas under long-term and short-term deals.Chevron’s two large domestic gas plants built as part of its $US54 billion Gorgon project and Wheatstone LNG in Western Australia are obliged under the state’s domestic gas reservation system to keep 15 per cent of supplies for domestic use.Chevron’s Wheatstone LNG plant in WA started up domestic gas supply in March this year. Supplied

The policy has ensured the market is well supplied, with consultancy EnergyQuest describing the west coast as “awash” with gas. WA wholesale gas prices averaged just $2.83 a gigajoule in the September quarter, compared with about $8.40/GJ in Sydney.

The 200 terajoules a day Wheatstone domestic gas plant, which started up in March this year, is running below full capacity as local customers build up. Chevron advised last year that the run rate at the plant would depend on the strength of local demand.

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