Chevron Moves Greater Gorgon Gas Development to FEED Phase

Chevron has decided to move the Australian Greater Gorgon gas development into the Front End Engineering and Design (FEED) phase.

The FEED scope for the Greater Gorgon development includes the establishment of a two-train (10 million tonnes per year) liquefied natural gas (LNG) facility and domestic gas plant on Barrow Island, supplied by gas fields in the Greater Gorgon area. The Greater Gorgon area is one of the largest undeveloped natural gas accumulations in the region.

The Greater Gorgon development is being pursued by an unincorporated joint venture consisting of the Australian subsidiaries of Chevron (50 percent) and ExxonMobil and Shell (each holding a 25 percent interest). The partners recently signed a Framework Agreement to align their equity interests and to pave the way for the combined development of Gorgon and nearby gas fields as one world-scale project.

George Kirkland, Chevron executive vice president for upstream and gas, said, "The commencement of FEED is another significant step forward for the development of Greater Gorgon's huge natural gas resources and will create a new legacy asset for our company."

He added, "Greater Gorgon is well positioned to supply LNG to customers in Asia and North America. Chevron has capabilities across the entire gas value chain to bring projects to life by connecting natural gas resources to customers around the world."

The managing director of ChevronTexaco Australia [note: name change to Chevron Australia planned to take effect July 1, 2005], Jay Johnson, said that "the FEED decision is an important step forward that will focus the design of this major project to ensure it can be competitive to meet the growing demand for gas in Asian and North American regions."

In conjunction with the FEED decision, the Gorgon joint venture is awarding two major contracts worth a total of more than USD $75 million (AUD $100 million) to complete the development's Front End Engineering, Procurement and Construction Management activities during the next 12 months.

The upstream contract, which includes all subsea facilities associated with transporting the gas to the processing facility, will be undertaken by JP Kenny/Technip in a 50/50 joint venture involving their Australian entities. Perth, Western Australia will be the central focus for upstream activities.

The downstream contract, which includes the LNG facility on Barrow Island, will be undertaken by the Kellogg Joint Venture -- Greater Gorgon, which includes Australian-based partner Clough Projects Australia Pty Ltd.

ChevronTexaco Australia Pty Ltd is leading the development of, and is a joint-venture participant in, the Greater Gorgon Area licenses; is a one-sixth joint-venture participant in the North West Shelf Venture; and is operator and joint-venture participant in the Barrow Island and Thevenard Island oil fields. All are located off the northwest coast of Australia.

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