Chevron firms up Gorgon deal with SK LNG

OREANDA-NEWS. Chevron has signed a sales and purchase (SPA) deal with South Korean conglomerate SK LNG Trading to supply 4.15mn t of LNG over five years starting in 2017 from Australia's 15.6mn t/yr Gorgon project, which is scheduled to start first shipments later this year.

More than 75pc of Chevron's share of LNG from Gorgon will be committed to customers in Asia, Chevron said. Chevron is the operator of the \$54bn project and has a 47.3pc stake. ExxonMobil and Shell each own 25pc, Japanese utilities Osaka Gas, Tokyo Gas and Chubu Electric Power own 1.25pc, 1pc and 0.417pc respectively

This is the second SPA Chevron has signed with a South Korean customer for Gorgon. It is supplying 500,000 t/yr for 20 years in a deal with GS Caltex agreed in September 2009. A heads of agreement deal at the same time with South Korean state-controlled gas firm Kogas for 1.5mn t/yr from Gorgon never turned into a binding agreement.

Chevron also has SPAs with Japanese utilities Tokyo Gas and Osaka Gas for 1.1mn t/yr for 25 years and 1.375mn t/yr for 25 years respectively. Tokyo Gas will take 150,000 t/yr directly through its stake and Osaka Gas will directly load 206,250 t/yr. Chubu Electric has a binding agreement with Chevron to buy 1.44mn t/yr of Gorgon LNG. Japanese buyers Kyushu Electric and Nippon Oil will each load 300,000 t/yr.