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Chevron and Chubu Electric Sign Major Gorgon LNG Deal

Mon, 12/21/2009 - 10:30am
Chevron Corporation

SAN RAMON, Calif., Dec. 16, 2009 â?" Chevron Corporation (NYSE: CVX) today announced that its Australian subsidiaries have signed binding long-term Sales and Purchase Agreements (SPAs) with Chubu Electric Power for a portion of Chevron's share of liquefied natural gas (LNG) from the Gorgon Project.

Chevron agreed to supply Chubu Electric 1.44 million metric tons per year (MTPY) of LNG for 25 years. Also, Chubu Electric intends to purchase 0.417 percent equity from Chevron's stake in the Gorgon Project.

"We are pleased to build on our long-term relationship with Chubu Electric and welcome them as a foundation customer and equity participant in the Gorgon Project," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Company. "The SPA with Chubu Electric continues to build momentum toward commercializing our equity natural gas in the project."

The agreement follows the recent signing of three binding long-term SPAs with Osaka Gas, Tokyo Gas and GS Caltex, a 50 percent-owned 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.

"The foundation customers in Gorgon are leading energy companies in the world's largest LNG markets. Our agreements position Chevron to deliver supplies to meet long-term demand in the growing Asia-Pacific region," said John Gass, president, Chevron Global Gas.

The Gorgon Project is operated by Chevron, which will have an approximate 47 percent interest in the project after the sale to Chubu.

The initial Gorgon Project development, in northwestern Australia, will include a three-train, 15 million-metric-tons-per-year liquefied natural gas facility and a domestic gas plant.

Chevron Corporation is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of approximately 62,000 employees who operate across the energy spectrum. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels and other renewables. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.

Some of the items discussed in this press release are forward-looking statements about Chevron's activities in Australia. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "estimates," "budgets" and similar expressions are intended to identify such forward-looking statements. The statements are based upon management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the factors that could cause actual results to differ materially are changes in prices of, demand for and supply of crude oil and natural gas; actions of competitors; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of production and development activities due to war, accidents, political events, civil unrest, or severe weather; government-mandated sales, divestitures, recapitalizations and changes in fiscal terms or restrictions on scope of company operations; and general economic and political conditions. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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