Chevron and KOGAS Sign Gorgon Gas Deal

Australian subsidiaries of Chevron Corporation (NYSE:CVX) and Korea Gas Corporation (KOGAS) have signed a Heads of Agreement (HOA) in Perth last night for the delivery of 1.5 million tonnes per annum (MTPA) of Liquefied Natural Gas (LNG) for 15 years from the Gorgon project.

As part of the arrangement, Chevron and KOGAS have an option to extend the agreement for a further five years. The parties are also discussing LNG sales and an equity purchase from Chevron’s Wheatstone project, to be located in the western Pilbara region about 200 kilometres south of the Wheatstone natural gas field.

Chevron Australia Managing Director Roy Krzywosinski, welcomed KOGAS as a major customer of the Gorgon project, which received approval to start construction earlier this week.

“This agreement represents the largest, long-term LNG sale between Australia and Korea, and the first long term sale between KOGAS and an Australian supplier. Korea is the world’s second largest importer of LNG and is a desirable market for LNG,” said Krzywosinski.

“The sale of Gorgon LNG to Korea reflects Australia’s growing reputation as an LNG supplier. We expect to build on this relationship with KOGAS as we move forward with our Australian LNG projects.”

This announcement follows Sale and Purchase Agreements with GS Caltex, Osaka Gas and Tokyo Gas, which were announced on 10 September 2009. Chevron expects additional agreements for the sale of Gorgon LNG to be executed in the coming months.

KOGAS was incorporated by the Korean Government in 1983 and has grown to become the largest single LNG buyer in the world. It operates three LNG import terminals as well as a gas pipeline network spanning more than 2700 kilometres across Korea.

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.

Chevron is one of the world's leading integrated energy companies and through its Australian subsidiaries, has been present in Australia for more than 50 years. With the ingenuity and commitment of more than 1,400 people, Chevron Australia leads the development of the Gorgon and Wheatstone natural gas projects; manages its equal one-sixth interest in the North West Shelf Venture; and operates Australia’s largest onshore oilfield on Barrow Island and the Thevenard Island oilfields. The company is also a participant in the Browse liquefied natural gas development and is a significant investor in exploration offshore northwest Australia, one of Chevron’s four global focus areas for exploration.

In addition, Chevron’s Perth-based Global Technology Centre provides technology support and solutions to the company’s operations in Australia and around the world. www.ChevronAustralia.com

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Some of the items discussed in this press release are forward-looking statements about Chevron’s activities in Australia. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “estimates,” “budgets” and similar expressions are intended to identify such forward-looking statements. The statements are based upon management’s current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. Among the factors that could cause actual results to differ materially are changes in prices of, demand for and supply of crude oil and natural gas; actions of competitors; timely completion of the development of the fields; the potential failure to achieve expected net production from existing and future crude-oil and natural-gas development projects; the company’s acquisition or disposition of assets; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential disruption or interruption of production and development activities due to war, accidents, political events, civil unrest, or severe weather; government-mandated sales, divestitures, recapitalizations and changes in fiscal terms or restrictions on scope of company operations; general economic and political conditions; and the factors set forth under the heading “Risk Factors” on pages 30 and 31 of the company’s 2008 Annual Report on Form 10-K. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.