Chevron inks Gorgon LNG supply deal with Nippon Oil

Chevron has signed an initial 15-year offtake agreement with Japan's Nippon Oil Corp to supply 300,000 tonnes of liquefied natural gas (LNG) a year from its $42 billion Gorgon LNG project in Western Australia.

This is the third agreement within a month signed Chevron with Japnese companies for oil from its $42-billion Gorgon LNG project in in Western Australia and Wheatstone project in northwestern Australia. (See: Chevron signs $90 billion gas deal with Tokyo Electric Power)

Earlier in September, it signed binding long-term SPAs worth $60 billion with Osaka Gas, Tokyo Gas and GS Caltex, a 50 per cent Chevron equity affiliate, for delivery of a total of nearly 3 MTPY, as well as a heads of agreement with the Korea Gas Corporation (KOGAS) for 1.5 MTPY.(See: Chevron inks $60 billion gas deal with Japan and South Korea)

Under the agreement, the Australian subsidiaries of Chevron, Chevron Australia Pty Ltd and Chevron International Gas Inc will supply Tokyo-based Nippon Oil 0.3 million metric tons per year (MTPY) of liquefied natural gas (LNG) for 15 years from the Chevron-operated Gorgon Project.

Although both companies have not disclosed the financial terms of the deal, analysts believe the agreement to be worth $3 billion annually.

The LNG will be shipped, starting from 2015 to the planned LNG terminal that Nippon Oil plans to construct in Hachinohe, northern Japan, for approximately 50 billion yen ($542 million).