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Chevron Secures Multiple Sales Agreements for Gorgon LNG

Chevron Chevron Corporation today announced that Australian subsidiaries of Chevron have signed three binding long-term Sales and Purchase Agreements for Chevron's share of liquefied natural gas (LNG) from the Gorgon project. The agreements are for a total supply of nearly 3 million tons per annum (MTPA) of LNG to Osaka Gas, Tokyo Gas, and GS Caltex.

Chevron will supply Osaka Gas 1.375 MTPA of LNG for 25 years. Osaka Gas will also purchase 1.25 percent equity in the Gorgon Project. Tokyo Gas will be supplied 1.1 MTPA over 25 years and will purchase a 1 percent equity stake. Supply from both agreements is expected to commence in the second half of 2014.

Chevron Australia Pty Ltd and Chevron International Gas Inc., have also signed separate agreements with GS Caltex Corp. for 0.5 MTPA of LNG for up to 20 years. The LNG to GS Caltex will be supplied from the Gorgon project and other gas within the global Chevron portfolio. GS Caltex is 50 percent owned by Chevron.

"We are pleased to welcome Osaka Gas and Tokyo Gas as foundation customers and equity participants in Gorgon. This builds upon our longstanding relationship with these companies and represents a major step towards the successful commercialisation of the Gorgon Project," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Company.

"Securing sales agreements with three major customers in Japan and Korea is a significant milestone in Chevron's efforts to commercialise our equity natural gas and grow our LNG business," said John Gass, president, Chevron Global Gas.

"With Osaka Gas and Tokyo Gas, we have as foundation customers two of the most experienced LNG buyers in the largest LNG market in the world," Gass said. He added, "The agreements with GS Caltex provide our initial entry into the important Korean LNG market and GS Caltex's first expansion from refining, petrochemicals and power into LNG."

Chevron expects further sales of Gorgon LNG to be executed in the coming months.

The Gorgon project is operated by Chevron Australia Pty Ltd (50 percent)* in joint venture with the Australian subsidiaries of ExxonMobil (25 percent) and Shell (25 percent). The project's scope includes a three-train, 15 MTPA LNG facility; a carbon dioxide injection project expected to be the world's largest; and a domestic gas plant.

* Chevron's stake will change from 50 percent to 47.75 percent once relevant approvals have been obtained on the equity agreements with Osaka Gas and Tokyo Gas.

Published 10/09/09

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