Australian subsidiaries of Chevron Corp. and Japan’s Chubu Electric Power Co. Inc. have signed binding long-term sales and purchase agreements (SPA) for a portion of Chevron’s share of liquefied natural gas (LNG) to be produced from the Gorgon Project off Australia’s coast.
Chevron agreed to supply Chubu Electric 1.44 million metric tons per year of LNG for 25 years. Also, Chubu Electric intends to purchase 0.417% equity from Chevron’s stake in the Gorgon Project.
“The SPA with Chubu Electric continues to build momentum toward commercializing our equity natural gas in the project,” said Jim Blackwell, president of Chevron Asia Pacific Exploration and Production Co.
The agreement follows the recent signing of three binding long-term SPAs with Osaka Gas, Tokyo Gas and GS Caltex, a 50%-owned Chevron equity affiliate, for delivery of nearly 3 million metric tons per year, as well as an agreement with the Korea Gas Corp. (KOGAS) for 1.5 million metric tons per year.
“The foundation customers in Gorgon are leading energy companies in the world’s largest LNG markets. Our agreements position Chevron to deliver supplies to meet long-term demand in the growing Asia-Pacific region,” said John Gass, president of Chevron Global Gas.
The Gorgon Project is operated by Chevron, which will have an approximate 47% interest in the project after the sale to Chubu.
The initial Gorgon Project development will include a three-train, 15 million-metric-ton-per-year LNG facility and a domestic gas plant.
On Tuesday Chevron announced an additional gas discovery in the Carnarvon Basin offshore Western Australia (see Daily GPI, Dec. 16). In September Chevron and partners Royal Dutch Shell plc and ExxonMobil Corp. said they were proceeding with the Gordon Project (see Daily GPI, Sept. 15).
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