Chevron and ENN sign Gorgon LNG agreement

Chevron Corp.’s (NYSE: CVX) Australian subsidiaries have signed a nonbinding heads of agreement (HOA) with ENN LNG Trading Co. Ltd. (ENN) for the delivery of liquefied natural gas (LNG) to China from the Chevron-operated Gorgon natural gas project in Australia.

When the deal is finalized, ENN is expected to receive up to 0.5 million metric tons per annum (Mtpa) of LNG over 10 years, with deliveries starting in 2018 or the first half of 2019.

This HOA follows Chevron’s recently announced nonbinding LNG supply HoA with China Huadian Green Energy Co. Ltd.

ENN LNG Trading Co. Ltd. is one of the subsidiaries of ENN Energy Holdings Ltd., which is one of the largest natural gas distribution companies in China. ENN Energy Holdings Ltd. operates in 146 cities across 17 provinces and autonomous regions, with over 11.3 million residential and 52 thousand industrial/commercial customers. ENN’s Zhoushan LNG receiving terminal is being constructed and expected to be in operation by 2018.

The Gorgon Project is a joint venture of the Australian subsidiaries of Chevron (47.3%), ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).

The Gorgon Project combines the development of the Gorgon Field and the nearby Jansz-Io Field. 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.

Chevron’s subsidiaries in Australia are also developing the Wheatstone Project as an LNG and domestic gas operation near Onslow, in the Pilbara region of Western Australia. The project’s initial capacity is expected to be 8.9 Mtpa of LNG.

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