KOGAS (Korea Gas Corporation) has struck a 20 year deal to buy LNG (liquefied natural gas) from Western Australia's Wheatstone gas project.

Chevron Corporation, American energy giant and operator of the LNG project in WA's Ashburton North, has announced that its subsidiaries in Australia had authorized a Heads of Agreement with Korea Gas on Tuesday.

Korean Gas, the leading purchaser of LNG in the world, has agreed to buy huge quantities of LNG, amounting to 1.5 million tones per year, in a period of 20 years.

The Korean energy firm also authorized a deal to obtain five per cent of shares in the Wheatstone field licenses of Chevron, and in the domestic gas and LNG processing facilities of the Wheatstone project.

The deal is the most recent in a series of agreements to provide LNG from major oild firms and clients in East Asia. This deal is also a major step in Chevron's aim of upping Wheatstone's credibility, which faces strong competition from similar gas projects.

Fadel Gheit, analyst from Oppenheimer & Co. remarked, "There is plenty of LNG coming out of Australia and obviously securing long-term supply contracts is very critical for the development of any major project."

Shares at Chevron closed trading at $72, an increase of 52 cents.