In similar fashion to a deal struck with foundation customer Tokyo Gas in December, Kansai Electric will also purchase a 5% equity interest in the Pluto development.

Kansai Electric is also an original customer of the North West Shelf venture and in 2004 renewed a 15-year supply contract.

The new agreement covers supply from the end of 2010, on an ex-ship basis, with an option to extend supply by five years.

An LNG sales and purchase agreement is expected to be negotiated by the end of this year and will be conditional on a final investment decision by Woodside, due in the second quarter of 2007.

Woodside chief executive Don Voelte and Kansai Electric president Shosuke Mori signed the agreement in Perth today.

Voelte said Woodside was delighted to welcome Kansai Electric as a foundation customer for Pluto.

“As one of Japan’s major electricity suppliers, Kansai Electric is an ideal customer,” Voelte said.

“Woodside and Kansai Electric have enjoyed a long and beneficial relationship through the North West Shelf Venture and we look forward to furthering this relationship through Pluto.”

Kansai Electric is one of the largest electric power companies in Japan, with 2005 operating revenue exceeding $US22 billion ($A30.6 billion). The company has more than 35,000MW of generating capacity, and more than 13 million residential, commercial and industrial customers.

Four months ago, Tokyo Gas signed a 15-year deal with Woodside to take between 1.5 and 1.75Mtpa of Pluto LNG from 2010. The contract also has a five-year extension option.

Discovered last April, the field is estimated to contain 3.5 trillion cubic feet of gas. But to justify the proposed two-train LNG project, Pluto must contain substantially more gas or Woodside must be banking on making more discoveries in the area or once a second train is introduced tying the development to another field, such as Chevron's nearby Wheatstone discovery.

Woodside aims to sell an initial 4Mtpa of LNG from Pluto. A final investment decision is due in mid-2007.