Released December 09, 2011 | PERTH, AUSTRALIA
en
Researched by Industrial Info Resources Australia (Perth, Australia)--Chevron (NYSE:CVX) (San Ramon, California) and Gorgon Joint Venture partners announced the finalization of a sales agreement with West Australian State Utility Companies, Synergy (Perth) and Verve Energy (Perth) for natural gas from the Gorgon Domestic Gas plant beginning in 2015, coinciding with first shipments of liquefied natural gas (LNG).
Sales and purchase agreements for Gorgon LNG had been reached sometime ago, with 14.4 million of its 15 million metric tonnes per year fully contracted. The delay in finalization of the domestic gas agreements had led natural gas customers to speculate the actual desirability of Chevron to develop the gas plant. The West Australian government has had a policy in place since the late 1980s, whereby a certain amount of natural gas is reserved for the domestic market, as opposed to all being exported to the lucrative international market.
In May 2009, Chevron released a tender for a package of 150 terajoules of natural gas per day. Verve and Synergy have reached an agreement with Chevron to purchase a combined total of 125 terajoules per day for a period of 20 years from the Gorgon, which is enough for Chevron to have consigned the first phase 150 terajoule-per-day capacity plant.
"We are pleased to have finalised two significant long-term domestic gas sales contracts for the Gorgon project, and we welcome Synergy and Verve as valued customers," said Roy Krzywosinski, the managing director of Chevron Australia. "Domestic gas is an important energy source for Western Australia, and these contracts mean more gas and competition for the local market."
Krzywosinski added, "It demonstrates the market is working. We have been actively marketing domestic gas from Gorgon, and we will continue to do so."
The delay in finding customers for Gorgon Domestic Gas, comparative to meeting sales goals for the LNG for export, was likely the consequence of Chevron's high asking price. The price for wholesale domestic gas contracts in Western Australia in 2010 was calculated at about AU$3.70 (US$3.79) per gigajoule. In 2005, the rate was closer to around AU$2.50 (US$2.56) per gigajoule. Gorgon has set a new benchmark with a mooted AU$7 (US$7.18)-per-gigajoule rate. The state of Western Australia has anticipated a domestic gas shortage for 2014-15, when it is expected that about 1,100 terajoules per day will be required by the state.
View Project Report - 200001234
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Sales and purchase agreements for Gorgon LNG had been reached sometime ago, with 14.4 million of its 15 million metric tonnes per year fully contracted. The delay in finalization of the domestic gas agreements had led natural gas customers to speculate the actual desirability of Chevron to develop the gas plant. The West Australian government has had a policy in place since the late 1980s, whereby a certain amount of natural gas is reserved for the domestic market, as opposed to all being exported to the lucrative international market.
In May 2009, Chevron released a tender for a package of 150 terajoules of natural gas per day. Verve and Synergy have reached an agreement with Chevron to purchase a combined total of 125 terajoules per day for a period of 20 years from the Gorgon, which is enough for Chevron to have consigned the first phase 150 terajoule-per-day capacity plant.
"We are pleased to have finalised two significant long-term domestic gas sales contracts for the Gorgon project, and we welcome Synergy and Verve as valued customers," said Roy Krzywosinski, the managing director of Chevron Australia. "Domestic gas is an important energy source for Western Australia, and these contracts mean more gas and competition for the local market."
Krzywosinski added, "It demonstrates the market is working. We have been actively marketing domestic gas from Gorgon, and we will continue to do so."
The delay in finding customers for Gorgon Domestic Gas, comparative to meeting sales goals for the LNG for export, was likely the consequence of Chevron's high asking price. The price for wholesale domestic gas contracts in Western Australia in 2010 was calculated at about AU$3.70 (US$3.79) per gigajoule. In 2005, the rate was closer to around AU$2.50 (US$2.56) per gigajoule. Gorgon has set a new benchmark with a mooted AU$7 (US$7.18)-per-gigajoule rate. The state of Western Australia has anticipated a domestic gas shortage for 2014-15, when it is expected that about 1,100 terajoules per day will be required by the state.
View Project Report - 200001234
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
