In December 2009, TEPCO entered into Heads of Agreement with Chevron Australia Pty Ltd and Chevron (TAPL) Pty Ltd (Chevron) (notification of this transaction released on December 5, 2009) to acquire an interest in the Wheatstone LNG Project. However, in light of subsequent events impacting TEPCO's management environment, a further decision was made with Chevron to have Mitsubishi Corporation (MC) and Nippon Yusen Kabushiki Kaisha (NYK) enter into a joint investment in the newly established Pan Pacific Energy K.K. (PE) resulting in the acquisition of a 10% interest in Wheatstone field licenses and an 8% interest in Wheatstone natural gas processing facilities.

The LNG Sale & Purchase Agreement (SPA) executed today between PE Wheatstone Pty Ltd (PEW), an affiliate of PE, and TEPCO stipulates that PEW will acquire approximately 0.7 million tons per annum (MTPA) of LNG to be purchased by TEPCO. Furthermore, TEPCO has entered into an agreement with Chevron to purchase an additional 0.4 MTPA of LNG. These two LNG SPAs with PEW and Chevron will pave the way for TEPCO's LNG purchases of approximately 1.1 MTPA in total.

In July 2011, TEPCO signed SPAs with Chevron, Apache Julimar Pty Ltd and Kufpec Australia (Julimar) Pty Ltd, to have up to 3.1 MTPA of LNG delivered to TEPCO (notification of this transaction released on July 27, 2011). These additional agreements executed today will allow TEPCO to procure 4.2 MTPA of LNG from the Project over a 20-year period.

The Project includes offshore natural gas production and transportation to the onshore site as well as LNG production at Ashuburton North in Western Australia. The Project will consist of two liquefied natural gas trains (anticipated start by end of 2016) with a combined capacity of 8.9 MTPA.

For the participation in this Project, MC, NYK and TEPCO have obtained approval from Japan Oil, Gas and Metals National Corporation (JOGMEC) to have it provide equity financing and loan guarantees to PE and PEW respectively, enabling public private partnership towards the stable supply of LNG.

The conclusion of the SPAs will reinforce TEPCO's policy of pursuing stable and economical fuel procurement to secure a stable energy supply.

Appendix: Summary of LNG SPAs and the Project(PDF 24.2KB)