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Chinese Power Generator, Chevron in Australia LNG Supply Pact

Chevron U.S.A. Inc. and China Huadian Green Energy Co. Ltd. have signed a nonbinding agreement for the former to supply 1 million tonnes per annum (mtpa) of liquefied natural gas (LNG) from Australia over a 10-year period beginning in 2020.

The LNG would be sourced from the Gorgon and Wheatstone LNG projects. "Chevron's equity gas from Australia is well-placed to meet the growing demand for natural gas in the Asia-Pacific region," said Roy Krzywosinski, managing director of Chevron Australia.

"This is an important step in the commercialization of Chevron's natural gas holdings in Australia and the establishment of our global liquefied natural gas portfolio," said Pierre Breber, executive vice president, Chevron gas and midstream. "As Chevron continues to grow into one of the world's largest LNG suppliers, this agreement represents further progress and diversification of our sales portfolio."

China Huadian Green Energy Co. is a subsidiary of China Huadian Group, which is one of the largest state-owned power generation companies and has a leading role in gas-fired power generation in China.

The Gorgon Project is a joint venture of the Australian subsidiaries of Chevron (47.3%), ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).

The Gorgon Project combines the development of the Gorgon Field and the nearby Jansz-Io Field. Facilities being built on Barrow Island include an LNG facility with three processing units capable of producing 15.6 mtpa of LNG, a carbon dioxide injection project and a domestic gas plant.

Chevron's subsidiaries in Australia are also developing the Wheatstone Project as an LNG and domestic gas operation near Onslow, in the Pilbara region of Western Australia. The project's initial capacity is expected to be 8.9 mtpa of LNG. The project also includes a domestic gas plant.

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