Chevron Secures Multiple Sales Agreements for Gorgon LNG
Three Deals Confirm Supply of Gorgon Gas to World's Largest LNG Markets
SAN RAMON, Calif., September 9, 2009 - Chevron Corporation (NYSE: CVX) today announced that Australian subsidiaries of Chevron have signed three binding long-term Sales and Purchase Agreements (SPAs) for Chevron's share of liquefied natural gas (LNG) from the Gorgon project. The agreements are for a total supply of nearly 3 million tons per annum (MTPA) of LNG to Osaka Gas, Tokyo Gas, and GS Caltex.
Chevron will supply Osaka Gas 1.375 MTPA of LNG for 25 years. Osaka Gas will also purchase 1.25 percent equity in the Gorgon Project. Tokyo Gas will be supplied 1.1 MTPA over 25 years and will purchase a 1 percent equity stake. Supply from both agreements is expected to commence in the second half of 2014.
Chevron Australia Pty Ltd and Chevron International Gas Inc., have also signed separate agreements with GS Caltex Corp. for 0.5 MTPA of LNG for up to 20 years. The LNG to GS Caltex will be supplied from the Gorgon project and other gas within the global Chevron portfolio. GS Caltex is 50 percent owned by Chevron.
"We are pleased to welcome Osaka Gas and Tokyo Gas as foundation customers and equity participants in Gorgon. This builds upon our longstanding relationship with these companies and represents a major step towards the successful commercialization of the Gorgon Project," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Company.
"Securing sales agreements with three major customers in Japan and Korea is a significant milestone in Chevron's efforts to commercialize our equity natural gas and grow our LNG business," said John Gass, president, Chevron Global Gas.
"With Osaka Gas and Tokyo Gas, we have as foundation customers two of the most experienced LNG buyers in the largest LNG market in the world," Gass said. He added, "The agreements with GS Caltex provide our initial entry into the important Korean LNG market and GS Caltex's first expansion from refining, petrochemicals and power into LNG."
Chevron expects further sales of Gorgon LNG to be executed in the coming months.
The Gorgon project is operated by Chevron Australia Pty Ltd (50 percent)* in joint venture with the Australian subsidiaries of ExxonMobil (25 percent) and Shell (25 percent). The project's scope includes a three-train, 15 MTPA LNG facility; a carbon dioxide injection project expected to be the world's largest; and a domestic gas plant.
Chevron Corporation is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of approximately 62,000 employees who operate across the energy spectrum. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels and other renewables. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.
Notes to Editor:
*Chevron's stake will change from 50 percent to 47.75 percent once relevant approvals have been obtained on the equity agreements with Osaka Gas and Tokyo Gas.
Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.
Some of the items discussed in this press release are forward-looking statements about Chevron's activities in Australia. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "estimates," "budgets," "will supply," "will be supplied" and similar expressions are intended to identify such forward-looking statements. The statements are based upon management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the factors that could cause actual results to differ materially are changes in prices of, demand for and supply of crude oil and natural gas; acquisition of the necessary approvals to complete the equity sales to Osaka Gas and Tokyo Gas; actions of competitors; timely completion of the development of the fields; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; the company's acquisition or disposition of assets; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential disruption or interruption of production and development activities due to war, accidents, political events, civil unrest, or severe weather; government-mandated sales, divestitures, recapitalizations and changes in fiscal terms or restrictions on scope of company operations; general economic and political conditions; and the factors set forth under the heading "Risk Factors" on pages 30 and 31 of the company's 2008 Annual Report on Form 10-K. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Updated: September 2009