Chevron sells Gorgon gas to China
Chevron has signed a non-binding Heads of Agreement (HoA) with ENN LNG Trading Company Limited (ENN) for the delivery of liquefied natural gas (LNG) to China from the Chevron-operated Gorgon natural gas project, offshore W. Australia.
When the deal is finalized, ENN is expected to receive up to 0.5 million metric tons per annum (MTPA) of LNG over 10 years, with deliveries starting in 2018 or the first half of 2019.
“This is one more step in the development of our Australian gas business and our global LNG portfolio,” said Mike Wirth, executive vice president, Chevron Midstream and Development. “It also represents further progress with new LNG buyers in China who are poised to transform the LNG landscape in that country.”
“As first LNG production from the Gorgon Project draws near, we welcome ENN as a new customer,” said Roy Krzywosinski, managing director, Chevron Australia. “This deal shows the competitiveness of LNG supply from Chevron’s Australian projects.”
As Chevron continues to grow into one of the world’s largest LNG suppliers, this HOA follows the recently announced non-binding LNG supply HoA with China Huadian Green Energy Co., Ltd.
ENN LNG Trading Company Limited is one of the subsidiaries of ENN Energy Holdings Ltd., which is one of the largest natural gas distribution companies in China. ENN Energy Holdings Ltd. operates in 146 cities across 17 provinces and autonomous regions, with over 11.3 million residential and 52 thousand industrial/commercial customers. ENN’s Zhoushan LNG receiving terminal is being constructed and expected to be in operation by 2018.
The Gorgon Project is a joint venture of the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent).
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.