Gas Marketing | Media Statements | Media | Chevron Australia > Chevron Secures Multiple Gorgon Gas Sales Agreements To Key Markets in Asia

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Chevron Secures Multiple Gorgon Gas Sales Agreements To Key Markets in Asia

PERTH, Western Australia, September 10 2009 – Chevron has announced that it has entered into three binding sale and purchase agreements (SPAs) for nearly 3 million tonnes per annum of liquefied natural gas (LNG) into Japan and South Korea, the world’s two largest LNG import markets. It has also signed two SPAs for the sale of equity in the Gorgon Project. Financial details of the LNG and equity SPAs were not disclosed.

Chevron Australia has signed binding LNG SPAs with Osaka Gas and Tokyo Gas for LNG supply from the Gorgon Project, commencing in the second half of 2014 for 25 years. Chevron will supply Osaka Gas with 1.375 million tonnes per annum (MTPA) of LNG and Tokyo Gas with 1.1MTPA of LNG.¹

Both Japanese utility companies are also purchasing from Chevron an equity share in the Gorgon Project.² Osaka Gas is purchasing 1.25 per cent and Tokyo Gas is acquiring a 1 per cent interest. Both agreements are subject to Australian Foreign Investment Review Board approval.

In addition, Chevron Australia Pty Ltd and Chevron International Gas Inc. have signed separate SPAs with GS Caltex Corporation, a major South Korean energy company. Chevron will supply GS Caltex with 0.5mtpa of LNG for up to 20 years.

The LNG to GS Caltex will be supplied from the Gorgon project and from other system gas within the global Chevron portfolio. GS Caltex is 50 percent owned by Chevron.

Chevron Australia Managing Director Roy Krzywosinski welcomed the SPAs as a key step towards a final investment decision on the Gorgon Project expected in the coming weeks.

“We are pleased to welcome Osaka Gas and Tokyo Gas both as foundation customers, as well as equity participants, in the Gorgon Project. These companies have a long history in the LNG industry and these SPAs build on the strong relationships we already enjoy with both companies,” Krzywosinski said.

John Gass, president, Chevron Global Gas added, “These agreements represent a significant milestone in Chevron’s efforts to commercialize our equity natural gas and grow our LNG business. The agreement with GS Caltex enhances Chevron’s strong position in South Korea, where GS Caltex is a leading oil refiner, with substantial petrochemical, power and city gas operations.”

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

The Gorgon Project is operated by the Australian subsidiary of Chevron (50 percent)2 in joint venture with Australian subsidiaries of ExxonMobil (25 percent) and Shell (25 percent). The project’s scope includes three, five million tonne per annum LNG trains; an underground carbon dioxide injection project expected to be the world’s largest; and a domestic gas plant.

Notes to Editor:

¹ These sales volumes are net of the LNG that they will lift as an equity participant.
² 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.