Apache Announces Agreement With Chevron and Tokyo Electric Regarding LNG Sales From Wheatstone Project in Western Australia

Oct 11, 2010, 09:00 ET from Apache Corporation

HOUSTON, Oct. 11 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today announced that a subsidiary has signed an agreement with a Chevron Corp. subsidiary and Tokyo Electric Power Company (TEPCO) regarding sales of liquefied natural gas (LNG) from the Chevron-operated Wheatstone project in Western Australia.

Apache Julimar Pty Ltd, an Apache subsidiary; KUFPEC Australia (Julimar) Pty Ltd, which is a subsidiary of Kuwait Foreign Petroleum Exploration Co. k.s.c. (KUFPEC), and Chevron Australia Pty Ltd, have signed an agreement with TEPCO to market LNG produced from their respective fields on a comingled basis to TEPCO.

Chevron and TEPCO announced in December 2009 a Heads of Agreement (HoA) to deliver 3.1 million tons per annum (mtpa) of LNG from Wheatstone for up to 20 years. The Apache and Kufpec subsidiaries will provide about 25 percent of the LNG.

Under a separate equity HoA also signed in December 2009, TEPCO intends to acquire equity interests in Chevron's Wheatstone field licenses and the Wheatstone natural gas processing facilities from which TEPCO intends to lift approximately 1 mtpa of LNG – its equity share of production.

"We are very pleased to sign this agreement, which provides a road map for integrating Apache and KUFPEC into Chevron's and TEPCO's LNG HoA and signifies the beginning of a long relationship between Apache and TEPCO," said Janine J. McArdle, Apache's senior vice president – gas monetization.

Apache Julimar Pty Ltd has a 65-percent interest in offshore license WA-356-P, which contains the Julimar and Brunello fields, and a 16.25-percent equity interest in the LNG facility. KUFPEC Australia (Julimar) Pty Ltd owns the remaining interest in the offshore license and an 8.75-percent interest in the LNG facility. The LNG facility's first phase will consist of two processing trains with a combined capacity of approximately 8.6 mtpa and a domestic gas plant. The onshore facilities will be located at Ashburton North near Onslow in Western Australia. A final investment decision on the first phase of the project is slated for the second half of 2011.

The Apache and KUFPEC subsidiaries will develop facilities to supply gas from their Julimar and Brunello discoveries to Wheatstone. Apache will operate the design and construction phases of this part of the project.

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina. From time to time, Apache posts announcements, updates and investor information, in addition to copies of all press releases, on its website, www.apachecorp.com.

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SOURCE Apache Corporation