Sector News

Chevron to Sell LNG to South Korea’s SK

January 21, 2015
Chevron Corp. said Wednesday that it agreed to sell output from its $54 billion Gorgon gas-export project in Australia to a division of South Korea’s SK Group .
The U.S. oil company said it agreed to sell 4.15 million metric tons of liquefied natural gas, or LNG, to SK LNG Trading Pte. Ltd. over a five-year period starting in 2017. The duration of the contract is relatively short. LNG sales pacts for large projects like Gorgon typically span decades.
The deal comes amid a slump in oil prices that also has driven down the price of LNG, which is sold in Asia at rates linked to the oil price. A spokesman for Chevron said the terms of the deal were confidential.
The deal means that during the five-year span, more than 75% of Gorgon’s output is now committed to customers in Asia, Chevron said.
Gorgon, which also counts Exxon Mobil Corp. and Royal Dutch Shell PLC as significant shareholders, is due to ship its first cargo of LNG later this year.
By Ross Kelly 

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