Chevron signs Japan deal
Chevron has struck its first Japanese sales agreement for North West LNG in eight years, last week announcing a five-year deal to supply Hokkaido Gas.
While the US oil and gas group said the contracted 500,000 tonnes of LNG would be drawn from its global portfolio, it is understood most of the gas will be sourced from Chevron’s Gorgon and Wheatstone projects in the North West.
The president of Chevron’s global gas division, John Kuehn, said the new sales deal — the first with Japan since the final foundation contract for Wheatstone in 2013 — opened up the key growth area of Hokkaido to the company’s LNG.
“It broadens our customer base in Japan, a market that is foundational to our LNG business,” Mr Kuehn said. “This new SPA (sale and purchase agreement) represents Chevron’s commitment to collaborate with Hokkaido Gas in diversifying energy solutions and advancing a lower carbon future in the Hokkaido area.”
First shipments under the new deal begin in April, 2022.
Chevron and other oil and gas producers are emerging from a tough 2020 in which energy sales and gas prices were hit by reduced demand on the back of COVID-19.
Thewest.com.au recently revealed Chevron’s Australian business dropped to a $US1.8b ($2.6b) loss in 2020 from a profit of $US1.4b in 2019, as sales revenues plunged 29 per cent to $US5.8b.
The result was also affected by an $800 million writedown against Chevron’s Barrow Island oil operations and nearly $4b of foreign exchange charges.
The prices of Chevron’s major product, LNG, more than halved before a recovery in global demand sparked a dramatic pick-up near the end of 2020.
Sales to Japan, which traditionally account for the lion’s share of Chevron’s revenues, were especially hit. Weaker prices and reduced sales volumes were the major cause.