Chevron signs second LNG deal to China as Gorgon output nears

By JAMES PATON
Bloomberg

Chevron signed its second agreement in as many months to sell liquefied natural gas (LNG) to China as the US company prepares to begin shipments from the $54-billion Gorgon project off northwest Australia.

Chevron plans to supply a unit of ENN Energy with as much as 500,000 tpy of LNG from Gorgon, the San Ramon, California-based company said. It follows Chevron’s initial agreement in late December to sell as much as 1 MMtpy of LNG to China Huadian Green Energy Co.

Gorgon, the largest resources project in Australian history, is getting ready to start exports as the Asian LNG market grapples with sliding energy prices and a supply glut.

Chevron said last week that it expects shipments from the Gorgon venture on Barrow Island to begin early this year.

When the deal is finalized, the contract with ENN will last 10 years with deliveries starting in 2018 or the first half of 2019. The shipments would represent about 3% of Gorgon’s annual production capacity of 15.6 million tons. Royal Dutch Shell and ExxonMobil are among the partners in the development.

The China Huadian accord, which starts in 2020, will help Chevron commercialize its Australian gas holdings, the US producer said last month. The company is also building the Wheatstone LNG venture in Australia, which will have an initial capacity of 8.9 million tpy.

• Most Read
• Most Commented