Chevron Strikes China LNG Supply Deal

Chevron Corporation announced Monday it has signed preliminary agreement to supply LNG to China Huadian Green Energy Co., Ltd.

Once the deal is finalised, China Huadian Green Energy is expected to receive up to 1 million metric tons per annum (MTPA) of LNG over 10 years starting in 2020, the company said in a statement.

The gas will be sourced from Chevron’s Australian projects.

"This is an important step in the commercialization of Chevron's natural gas holdings in Australia and the establishment of our global liquefied natural gas portfolio," said Pierre Breber, executive vice president, Chevron Gas and Midstream. "As Chevron continues to grow into one of the world's largest LNG suppliers, this agreement represents further progress and diversification of our sales portfolio."

China Huadian Green Energy Co. Ltd. is a subsidiary of China Huadian Group, which is one of the largest state-owned power generation companies and has a leading role in gas-fired power generation in China. 

Chevron is developing the Gorgon LNG project in Australia. The project combines the development of the Gorgon Field and the nearby Jansz-Io Field. Facilities being built on Barrow Island include an LNG facility with three processing units capable of producing 15.6 MTPA of LNG, a carbon dioxide injection project and a domestic gas plant.

The US energy major is also developing the Wheatstone project as an LNG and domestic gas operation near Onslow, in the Pilbara region of Western Australia.The project's initial capacity is expected to be 8.9 MTPA of LNG. The project also includes a domestic gas plant.