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Chevron Mulls LNG Supplies to China

Maritime Activity Reports, Inc.

January 19, 2016

Image: Chevron Australia

Image: Chevron Australia

 Energy giant Chevron has signed a preliminary agreement with China's ENN LNG Trading company to supply liquefied natural gas (LNG) from its $54 billion Gorgon LNG project in Western Australia.

Chevron plans to supply a unit of ENN Energy Holdings Ltd. with as much as 500,000 metric tons of LNG a year from Australia's largest gas project, Gorgon. It follows Chevron’s initial agreement in late December to sell as much as 1 million tons of LNG a year to China Huadian Green Energy Co.
US-listed Chevron said that once the deal is finalised it expects to supply ENN with up to half a million tonnes of LNG per annum over 10 years. 
"When the deal is finalized, ENN is expected to receive up to 0.5 mtpa of LNG over 10 years, with deliveries starting in 2018 or the first half of 2019," says a company statement. 
“This is one more step in the development of our Australian gas business and our global LNG portfolio,” said Mike Wirth, executive V.P., Chevron Midstream and Development. “It also represents further progress with new LNG buyers in China who are poised to transform the LNG landscape in that country.”
“As first LNG production from the Gorgon Project draws near, we welcome ENN as a new customer,” said Roy Krzywosinski, managing director, Chevron Australia. “This deal shows the competitiveness of LNG supply from Chevron’s Australian projects.” 
ENN Energy Holdings operates in 146 cities with over 11.3 million residential and 52 thousand industrial and commercial customers. The company's LNG receiving terminal is being constructed and expected to be in operation by 2018.
In the Gorgon project − with expected capacity of 15.6 million tons of LNG every year − Chevron, the operator, has a 47.3% interest. Both Exxon Mobil Corporation and Royal Dutch Shell plc own 25% each. The remaining stake is in the possession of Osaka Gas, Tokyo Gas and Chubu Electric Power.     
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