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Chevron, Japan's Osaka Gas Agreement to Deliver LNG from Gorgon Project

Chevron Corp.'s Australian unit last week signed a "heads of agreement" with Japan's Osaka Gas Co. Ltd. to deliver 1.5 million metric tons/year of liquefied natural gas (LNG) from the Gorgon Project beginning in 2011. The parties also are discussing a possible sale of equity interest in the project, which is jointly owned by Chevron (50%), Royal Dutch Shell (25%) and ExxonMobil Corp. (25%).

Subsidiary Chevron Australia said the agreement with Osaka would not change any of Chevron's plans to deliver LNG supplies to one of the two North American projects it is developing. Chevron's Terminal GNL Mar Adentro near South Coronado Island in Baja California, Norte, Mexico, has received all major permits for construction (see NGI, Oct. 10). And, Chevron has an agreement for to use 700 MMcf/d of regasification capacity at Cheniere Energy's Sabine Pass LNG receiving terminal under development in Cameron Parish, LA.

"This latest agreement further underpins the development of the project and demonstrates the momentum behind Gorgon LNG," said Chevron Global Gas President John Gass. "The Gorgon Project has reached a number of milestones this year, including entering the front-end engineering and design phase and securing multiple foundation LNG sales, bringing Gorgon LNG closer to commercialization and a final investment decision."

The Gorgon Project is scheduled to ramp up in 2010, and is to include an initial two-train 10 million tonnes/year LNG facility and a planned gas plant located on Barrow Island in Australia.

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