Chevron Australia Signs Heads of Agreement for LNG Sales to Osaka Gas

Chevron Corporation (NYSE: CVX) reports the signing of a Heads of Agreement between Chevron Australia Pty Ltd, a subsidiary of Chevron Corporation, and Osaka Gas Co. Ltd, for 1.5 million tons per annum (MTPA) of Chevron's share of Gorgon liquefied natural gas (LNG) over 25 years commencing in 2011. The parties are also discussing the details of a potential sale and purchase of an equity interest in the Gorgon Project.

In welcoming Osaka Gas as a foundation customer, John Gass, president of Chevron Global Gas, said: "Osaka Gas will play a distinctive role in the foundation of the Gorgon Project. We look forward to working with Osaka Gas to explore joint business opportunities along the gas value chain.

"This latest agreement further underpins the development of the project and demonstrates the momentum behind Gorgon LNG," said Gass.

Gass added, "The Gorgon Project has reached a number of milestones this year, including entering the front-end engineering and design phase and securing multiple foundation LNG sales, bringing Gorgon LNG closer to commercialization and a final investment decision."

The balance of Chevron's entitlement to LNG from the first two trains of the Gorgon Project will be available to supply markets such as North America, where Chevron is pursuing a portfolio of options for importing natural gas.

The Gorgon Project, in which Chevron Australia holds a 50 percent operating interest, is to include an initial two train 10 MTPA LNG facility and a planned domestic gas plant located on Barrow Island. The project participants include the Australian subsidiaries of Shell (25 percent) and ExxonMobil (25 percent).