Chevron signs $60B gas deal with S. Korea, Japan

SYDNEY - September 10, 2009

Chevron's Australian subsidiary will supply nearly 3 million tons (2.72 metric tons) a year to the countries, generating AU$70 billion in exports over the next 25 years, Prime Minister Kevin Rudd told Parliament.

Much of the gas will come from the yet-to-be developed Gorgon gas field off Australia's far northwest coast.

The Gorgon project is being developed by Australian units of Chevron Corp., ExxonMobil Corp. and Royal Dutch Shell PLC. Last month, PetroChina Co. signed an AU$50 billion deal to buy 2.5 million tons per year of liquefied natural gas from the Gorgon gas field.

"These are massive projects that will generate economic growth, income, jobs and prosperity for the nation for decades to come," Rudd said.

In a statement, Chevron said Japan's Osaka Gas will be supplied with 1.375 million tons per year, Tokyo Gas will get 1.1 million tons and GS Caltex of South Korea 0.5 million tons.

Chevron, which holds a 50 percent stake in the project, has also agreed to sell an equity share of 1.25 percent in the development to Osaka Gas and 1 percent to Tokyo Gas. ExxonMobil and Royal Dutch Shell each hold a 25 percent stake in Gorgon, which is expected to pump up to 15 million tons of liquefied natural gas per year when it achieves full production.

"This builds upon our longstanding relationship with these companies and represents a major step towards the successful commercialization of the Gorgon Project," Jim Blackwell, president of Asia Pacific Exploration and Production for Chevron, said in a statement.

Chevron said it expects to announce further sales from the Gorgon project in the next few months.

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