Chevron Inks Deal With ENN to Supply LNG from Gorgon Project to China

Chevron Corporation's Australian subsidiaries signed a non-binding Heads of Agreement (HoA)  with ENN LNG Trading Company Limited (ENN) to supply liquefied natural gas (LNG) to China from the company-operated Gorgon natural gas project offshore Western Australia.

When the agreement is finalized, ENN will receive up to 0.5 million metric tons per annum (Mtpa) of LNG over 10 years from the Gorgon project, with deliveries commencing 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 ... It also represents further progress with new LNG buyers in China who are poised to transform the LNG landscape in that country,” Mike Wirth, executive vice president, Chevron Midstream and Development said in a press release Monday.

The latest deal follows the recently announced non-binding LNG supply HoA with another Chinese company, China Huadian Green Energy Co., Ltd.

ENN LNG Trading Company Limited is a subsidiary of ENN Energy Holdings Ltd., which is one of the largest natural gas distribution companies in China, with operations in 146 cities in 17 provinces and autonomous regions and supplying over 11.3 million residential and 52,000 industrial/commercial customers. ENN’s Zhoushan LNG receiving terminal is currently under construction and is expected to be in operation by 2018.

“As first LNG production from the Gorgon Project draws near, we welcome ENN as a new customer,” Roy Krzywosinski, managing director, Chevron Australia said.

Partners in the Gorgon Joint Venture include Chevron's Australian subsidiaries (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. Project 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.

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