A multi-billion dollar agreement for the sale gas from the Pluto LNG Project has been signed which will see 3.75 MMt/a of LNG supplied to Tokyo Gas and Kansai Electric for 15 years beginning in late 2010.

The Sale and Purchase Agreements were signed by Woodside Chief Executive Don Voelte and representatives of Tokyo Gas and Kansai Electric of Japan in Sydney.

Development of the Pluto LNG Project was approved in July, subject to receipt of final environmental and other regulatory approvals.

Agreements were also signed which see Tokyo Gas and Kansai Electric will take equity in the Pluto project. Both companies will each take 5 per cent equity in the Pluto permit (WA-350-P) and the Pluto Train 1 infrastructure, reducing Woodside’s overall interest in the project to 90 per cent.

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Tokyo Gas and Kansai Electric committed to becoming customers of the Pluto project at an early stage and their commitment to the development allowed Woodside to move quickly to secure funding approval.

These agreements were followed by the signing of a key terms agreement for PetroChina to potentially purchase 2 to 3 MMt/a of LNG from the Browse LNG Development for a period of 15 to 20 years.

The agreement, signed with Browse operator Woodside is a preliminary agreement which agrees on the key commercial parameters normally included in a sale and purchase agreement, including LNG price.

The parties will negotiate in good faith to conclude an LNG supply agreement based on the key terms agreement.

Supply is targeted to commence between 2013 and 2015, with the agreement subject to conditions including a final investment decision on the Browse project and relevant government approvals.

The Browse joint venturers have not been party to the agreement to this point, however the agreement provides the opportunity for commingled sales.

This agreement was signed on the sidelines of the Asia-Pacific Economic Cooperation forum, held in Sydney during September. Present at the signing ceremony were Australian Prime Minister John Howard and Chinese President Hu Jintao.

Mr Voelte said the agreement further strengthened the company’s position as an LNG supplier to the Asia-Pacific region.

PetroChina is one of China’s largest energy companies and this agreement with such a significant foundation customer provides increased certainty to move the Browse development forward.