PERTH, Dec 7 - Chevron Corp's (CVX.N) A$90 billion ($82.5 billion) sale of Wheatstone liquefied natural gas to Tokyo Electric Power (9501.T) is set to add pressure on rival Australian projects in their race to find customers.
The deal, which would see Japan's top utility take almost half of Wheatstone's annual output, pushes the project up the rankings in terms of feasibility among the long list of planned LNG ventures in the region.
"The deal with TEPCO has put Wheatstone on the map as a very credible competitor against other LNG projects that are marketing their gas," said Mark Greenwood, an energy analyst at JP Morgan.
"And while this is fantastic for Chevron, it will no doubt be negative for other players like Woodside (WPL.AX), Santos (STO.AX) and Origin (ORG.AX)."
Woodside Petroleum, Santos and Origin Energy all harbour ambitious growth plans for their LNG business and are each involved in LNG projects that are in varying degrees of progress.
The sale would perhaps deal the strongest blow to ConocoPhillips (COP.N) and Origin's planned LNG project on Australia's east coast.
It has not yet clinched any sales and Conoco was likely to have been targetting TEPCO as a potential customer given their existing relationship in the Conoco-operated Darwin LNG project in Australia, said Greenwood.
"Longer term, the demand will be there but we think there's certainly a market window for operators to sign with customers, or face delays in their projects," he said.
Projects that are sanctioned at a later date could also see LNG prices come under pressure and erode their profitability, Di Brookman, an energy analyst at CLSA Asia Pacific, said.
The deal, which would see Japan's top utility take almost half of Wheatstone's annual output, pushes the project up the rankings in terms of feasibility among the long list of planned LNG ventures in the region.
"The deal with TEPCO has put Wheatstone on the map as a very credible competitor against other LNG projects that are marketing their gas," said Mark Greenwood, an energy analyst at JP Morgan.
"And while this is fantastic for Chevron, it will no doubt be negative for other players like Woodside (WPL.AX), Santos (STO.AX) and Origin (ORG.AX)."
Woodside Petroleum, Santos and Origin Energy all harbour ambitious growth plans for their LNG business and are each involved in LNG projects that are in varying degrees of progress.
The sale would perhaps deal the strongest blow to ConocoPhillips (COP.N) and Origin's planned LNG project on Australia's east coast.
It has not yet clinched any sales and Conoco was likely to have been targetting TEPCO as a potential customer given their existing relationship in the Conoco-operated Darwin LNG project in Australia, said Greenwood.
"Longer term, the demand will be there but we think there's certainly a market window for operators to sign with customers, or face delays in their projects," he said.
Projects that are sanctioned at a later date could also see LNG prices come under pressure and erode their profitability, Di Brookman, an energy analyst at CLSA Asia Pacific, said.
