Chevron and KOGAS Sign Agreement for Gorgon LNG
15-year Deal Builds on Several Recent Supply Commitments Commercializing Chevron's Equity Natural Gas in Australia
SAN RAMON, Calif., September 15, 2009 - Chevron Corporation (NYSE: CVX) today announced that its Australian subsidiaries have signed a Heads of Agreement (HOA) with the Korea Gas Corporation (KOGAS) for 1.5 million metric tons per annum (MTPA) of liquefied natural gas (LNG) from the Gorgon project.
As part of the arrangement, Chevron and KOGAS have an option to extend the 15-year agreement for a further five years. The parties are also discussing LNG sales and an equity purchase from Chevron's Wheatstone project, located in northwest Australia.
The HOA announcement follows the signing of three Sales and Purchase Agreements on September 10, 2009 for a total supply of approximately 3 MTPA to Osaka Gas, Tokyo Gas, and GS Caltex. Chevron expects additional agreements for the sale of Gorgon LNG to be executed in the coming months.
"Following the final investment decision in the Gorgon project, this agreement is another example of how Chevron is progressing the monetization of its significant natural gas holdings in Australia," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Company.
"KOGAS is the single largest LNG buyer in the world and we expect to build on this relationship as Gorgon moves toward first gas," said John Gass, president, Chevron Global Gas.
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.
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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" 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; 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