Alinta lines up Chevron gas supply

Alinta Energy has struck its second domestic gas supply deal in a week, agreeing to buy 46 petajoules from Chevron over five years from 2027 as it plots a Cataby power station.

Chevron will supply Alinta with the gas from its Gorgon and Wheatstone facilities in the North West, and it will be used to supply WA homes, businesses and industry. 

Chevron Australia president Balaji Krishnamurthy said the deal extended a relationship spanning back four decades and was an endorsement of WA’s domestic gas reservation policy. 

“The agreement is another demonstration of the way LNG developments, under WA’s long-standing domestic gas policy, have enabled a well-supplied domestic gas market, benefitting homes, businesses and vital industries,” he said.

“Natural gas underpins our everyday lives, from powering electricity generation to supporting the state’s world class mining sector, and we remain committed to delivering the affordable, reliable energy that Western Australians depend on.

“Enduring partnerships, like the one we have with Alinta Energy, are how that energy reaches homes and businesses right across the state.”

The deal means Alinta has secured 76 petajoules of gas supply in a matter of days, after it struck a deal to buy 30 petajoules of gas from a Japanese consortium which owns a stake in the Woodside-operated Scarborough LNG project earlier this week.

That deal, with LNG Japan Corporation – jointly owned by Sumitomo and Sojitz Corporation – will run into the ‘early 2030s’ but an exact term has not been specified.

Alinta managing director and chief executive Jeff Dimery said the Chevron deal gave his company greater certainty over its position in the market into the 2030s.

“Securing long-term supply from established projects like Gorgon, Wheatstone and the North West Shelf is critical to meeting the needs of our customers and supporting the state’s energy security,” he said. 

“This agreement gives us greater certainty in our portfolio and ensures we can continue to provide dependable energy for households, businesses and industry as the energy system evolves.”

The deals have been announced against a backdrop of heightened political uncertainty over the future of domestic gas reservation in WA.

The state’s long-standing 15 per cent domestic gas reservation policy is still in effect, but it remains to be seen whether a mooted 20 per cent federal reservation policy will usurp the policy in WA.

The state government initially sought assurances that the WA policy would not be impacted by the federal measure but appeared to soften its position in a conversation with the Australian Financial Review this week.

Alinta is in the process of planning a new gas power station at Cataby in the Mid West, which would be gas powered and supply up to 400MW of energy to the state’s electricity grid over 20 years. 

The project was announced in March and referred to the EPA this week.