Chevron and Kyushu Electric Sign Multiple LNG Deals
Agreements Signed for Delivery of LNG From Gorgon and Wheatstone Projects and the Purchase of an Equity Interest in Wheatstone
SAN RAMON, Calif., January 25, 2010 – Chevron Corporation (NYSE: CVX) today announced that its Australian subsidiaries have signed multiple Heads of Agreements (HOAs) with Kyushu Electric Power Co., Inc. for the delivery of liquefied natural gas (LNG) from the Chevron-operated Gorgon and Wheatstone natural gas projects.
Under the agreements, Kyushu Electric anticipates receiving 0.3 million tons per annum (mtpa) of LNG from the Gorgon Project, for 15 years.
Under the agreement, Kyushu Electric also intends to acquire 1.83 percent of Chevron's equity share in the Wheatstone field licenses and a 1.37 percent interest in the Wheatstone natural gas processing facilities to be developed onshore near Onslow in northwestern Australia. Additionally, Kyushu Electric expects to purchase 0.7 mtpa of LNG from the Wheatstone Project for up to 20 years. This sales volume is net of the LNG that Kyushu Electric will lift as an equity participant in Wheatstone. Including this equity participation, Kyushu Electric will take delivery of 0.8 mtpa of LNG from the Wheatstone Project.
"We are pleased to welcome Kyushu Electric as a gas customer for our Gorgon and Wheatstone projects and equity holder in Wheatstone," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Company.
John Gass, president, Chevron Global Gas said, "Kyushu Electric is a leading company in one of the world's largest LNG markets. We already have a long-standing relationship with Kyushu Electric through our participation in the North West Shelf Venture, and we look forward to expanding this relationship through our two new major Australian LNG projects."
Construction of the Gorgon Project began in the second half of 2009, with first gas planned for 2014. The initial project includes a 15 mtpa LNG facility and a domestic gas plant in northwestern Australia. Chevron is the operator and has an approximate 47 percent interest in the project.
The Wheatstone project entered the front end engineering and design phase in July 2009 and expects to make a final investment decision in 2011. The initial phase of the project plans to have the capacity to process 8.6 mtpa of LNG and a domestic gas plant. Chevron is the operator and holds an approximate 75 percent interest in the project.
In October 2009, Chevron announced it had signed a binding agreement with Apache Julimar Pty Ltd, a subsidiary of the Apache Corporation, which will assume a 16.25 percent equity interest in the Wheatstone Project, and KUFPEC Australia (Julimar) Pty Ltd, a subsidiary of the Kuwait Foreign Petroleum Exploration Company k.s.c., which will assume an 8.75 percent interest in the project. Under this agreement, Chevron is responsible for marketing LNG produced from the Julimar and Brunello fields.
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; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; potential delays in the development, construction or start-up of planned projects; 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; and general economic and political conditions. You 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: January 2010