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Apache, Chevron to Supply LNG to Shubu Electric

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Oil companies Chevron (NYSE: CVX  ) , Apache Corporation (NYSE: APA  ) , and their partners have finalized long-term agreements to supply Japan's Chubu Electric Power Company with liquefied natural gas extracted from their Wheatstone Project in Western Australia, the companies announced Thursday.

The agreements call upon the Wheatstone partners to supply 1 million metric tons of LNG annually over the next 20 years. This amounts to 11.2% of Wheatstone's projected 8.9 million ton annual production capacity.

If you break out revenues from this supply agreement, 64% should go to Chevron, 13% to Apache, and 6% to Royal Dutch Shell (NYSE: RDS-A  ) , with other partners accounting for the balance, based on their ownership interests in the project. Chevron will benefit most of all from the deal, inasmuch as it owns an 80% interest in the Wheatstone and Iago gas fields that supply 80% of the feedgas converted into LNG at the Wheatstone project.

Chevron shares are flat on the news, while Apache shares are up about 2.4%. Royal Dutch Shell is down 0.7%.

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Rich Smith

I love things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.

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Related Tickers

11/27/2015 1:01 PM
APA $49.42 Down -0.93 -1.85%
Apache Corp CAPS Rating: ****
CVX $90.37 Down -0.50 -0.55%
Chevron CAPS Rating: ****
RDS-A $50.07 Up +0.14 +0.28%
Royal Dutch Shell… CAPS Rating: ***