The resource contains about 40 trillion cubic feet LNG – that’s enough to power a city of 1 million people for 800 years.

Globally, the net impact of using Gorgon LNG will result in about 45 million tones less greenhouse gas emissions, when comparing against coal – and that’s the equivalent of taking about two-thirds of all vehicles off Australian roads.

Chevron announced that its Australian subsidiaries have signed a Heads of Agreement (HOA) with the Korea Gas Corporation (KOGAS) for 1.5 million metric tons per annum (MTPA) of liquefied natural gas (LNG) from the Gorgon project.

Gorgon will be an important pillar of the Australian economy for more than 40 years. Economic benefits from the first 30 years of the initial project scope,according to ACIL Tasman will include a projected AU$64 billion boost to Australia’s Gross Domestic Product and direct and indirect employment of around 10,000 people at peak construction. Australian businesses also will benefit with many contractor opportunities.

As part of the arrangement, Chevron and KOGAS have an option to extend the 15-year agreement for a further five years. The parties are also discussing LNG sales and an equity purchase from Chevron's Wheatstone project, located in northwest Australia.

The HOA announcement follows the signing of three Sales and Purchase Agreements on September 10, 2009 for a total supply of approximately 3 MTPA to Osaka Gas, Tokyo Gas, and GS Caltex. Chevron expects additional agreements for the sale of Gorgon LNG to be executed in the coming months.

"KOGAS is the single largest LNG buyer in the world and we expect to build on this relationship as Gorgon moves toward first gas," said John Gass, president, Chevron Global Gas.

The Gorgon project is operated by Chevron Australia Pty Ltd (50 percent) in joint venture with the Australian subsidiaries of ExxonMobil (25 percent) and Shell (25 percent). The project's scope includes a three-train, 15 MTPA LNG facility; a carbon dioxide injection project expected to be the world's largest; and a domestic gas plant.

Tags: Chevron Corporation