Chevron signs Gorgon LNG supply pact with Korea’s SK LNG Trading

Chevron has signed a binding sales and purchase agreement (SPA) with SK LNG Trading, the company announced today.

Under the SPA, SK LNG Trading, which is part of a leading industrial conglomerate in South Korea, will receive 4.15 million tons of LNG over a five-year period starting in 2017.

During the time of this agreement, over 75% of Chevron's equity LNG from Gorgon will be committed to customers in Asia.

"This agreement is an important step in the commercialization of Chevron's significant natural gas holdings in Australia," said Pierre Breber, president of Chevron's gas and midstream business.

"As Chevron continues to grow into one of the world's largest LNG suppliers, this SPA represents further progress and diversification of our sales portfolio," he added.

The Chevron-operated 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 a liquefied natural gas (LNG) facility with three processing units capable of producing 15.6 million tpy of LNG, a carbon dioxide injection project and a domestic gas plant.

"We are pleased with the opportunity to supply LNG to SK and look forward to building lasting relationships with our customers in the region as the Gorgon and Wheatstone projects move into operations," said Roy Krzywosinski, managing director of Chevron Australia.

"SK joins our existing strong LNG customer base and demonstrates the Chevron-led Gorgon and Wheatstone projects are well-placed to meet the growing demand for natural gas in the Asia-Pacific region," he added.

Financial terms of the agreement were not disclosed.

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