Chevron Corp took an important step towards commercialisation of its natural gas holdings in Australia when its wholly-owned subsidiary, Chevron U.S.A. Inc., signed a non-binding liquefied natural gas (LNG) supply Heads of Agreement (HOA) with China Huadian Green Energy Co Ltd. When the agreement is finalised, China Huadian Green Energy is expected to receive up to 1 million metric tonnes per annum. (mtpa).

China Huadian Green Energy Co Ltd. is a subsidiary of China Huadian Group, which is one of the largest state-owned power generation companies and has a leading role in gas-fired power generation in China.

“This is an important step in the commercialization of Chevron’s natural gas holdings in Australia and the establishment of our global liquefied natural gas portfolio,”. “As Chevron continues to grow into one of the world’s largest LNG suppliers, this agreement represents further progress and diversification of our sales portfolio,” said Pierre Breber, executive vice president, Chevron Gas and Midstream.

The HOA will have particular benefit to the Chevron-led Gorgon LNG Project. Chevron (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) are the joint venture partners in the project.

“We welcome the opportunity to supply LNG to China Huadian and look forward to building lasting relationships with our customers in the region as the Chevron-operated Gorgon and Wheatstone projects move into operations,” said Roy Krzywosinski, managing director, Chevron Australia. “The China Huadian agreement demonstrates Chevron’s equity gas from Australia is well-placed to meet the growing demand for natural gas in the Asia-Pacific region.”

The Gorgon Project is a joint venture of the Australian subsidiaries of

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. The project also includes a domestic gas plant.

Len Vermillion can be reached at lvermillion@hartenergy.com.