Gas Week

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Gorgon partners, Chevron and ExxonMobil and Shell: 20-year contract term Shell to sell 1 million tonnes of LNG a year to PetroChina

Posted by gasweek on 18 September, 2007

Shell and PetroChina concluded a binding heads of agreement for the long­term supply of LNG “with the primary source being the Gorgon gas project”. Shell and PetroChina would work to conclude and execute a detailed LNG sale and purchase agree­ment before December next year, conditional on a final investment decision by Gorgon partners, Chevron (50 per cent), and Ex­xonMobil and Shell (25 per cent each), reported The Australian, (5/9/2007, p.29).

20-year contract term:During the 20-year contract term, Shell would sell 1 million tonnes of LNG a year to PetroChina, which is Asia’s biggest oil company. Documents recognising the agreement were signed by Shell Gas & Power Asia executive vice-president Jon Chadwick and Pet­roChina vice-president Sun Longde. Present at the signing ceremony were WA Premier Alan Carpenter and the chairman of China’s National Development and Reform Commission, Ma Kai.

15 million tonnes a year mooted:Chevron said it had preliminary ar­rangements to market 90 per cent of its production share. The Gorgon project has pre­liminary environmental approval for two trains (plants) producing 10 million tonnes a year. But with costs rising, a new scoping study is understood to have led to consideration by the partners of a three-train facility producing 15 million tonnes a year, and this would require further environmental investiga­tion.

The Australian, 5/9/2007, p. 29

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