Chevron Corporation announced today that its Australian subsidiaries signed a Heads of Agreement (HOA) with Korea Gas Corporation (KOGAS) for the delivery of LNG from the Chevron-operated Wheatstone natural gas project in Australia.
Under the HOA, KOGAS expects to purchase 1.5 million tpa of LNG for up to 20 years from the Wheatstone project participants. Approximately 75% of the 1.5 million tpa is expected to be purchased from Chevron, with the remainder from other Wheatstone hub participants.
In addition to being a foundation customer of the Wheatstone project, KOGAS signed an equity HOA to acquire a 5% interest in each of Chevron's Wheatstone field licenses and in the Wheatstone project LNG and domestic gas processing facilities. Including this equity participation, KOGAS plans to take delivery of a total of approximately 1.95 million tpa of LNG from the Wheatstone project.
Chevron Australia managing director, Roy Krzywosinski, said the agreement demonstrated successful coordinated LNG marketing for the Wheatstone foundation project. "The Wheatstone hub at Ashburton North has been established to process our significant equity gas as well as third-party natural gas resources located in the Western Carnarvon Basin," Krzywosinski said.
Front-end engineering and design is currently being completed on the Wheatstone project ahead of a planned final investment decision in 2011. In October 2009 Chevron signed a binding agreement with Apache Julimar Pty Ltd., which will assume a 16.25% equity interest in the Wheatstone project, and with KUFPECAustralia (Julimar) Pty Ltd, which will assume an 8.75% interest in the project. Chevron is responsible for the marketing of LNG from the Wheatstone project.
In September 2009, KOGAS and Chevron also agreed to an HOA for the delivery of 1.5 MTPA of LNG from the Gorgon project for 15 years, with an option to extend the agreement for an additional five years.
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