Chevron makes LNG debut for Gorgon project

Company said its Australian gas project is starting to generate revenue.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   March 21, 2016 at 6:41 AM
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SAN RAMON, Calif., March 21 (UPI) -- U.S. energy company Chevron said it was now generating revenue from its Gorgon liquefied natural gas project in Australia with the delivery of its first cargo.

Chevron said its first shipment of LNG from its multi-billion Gorgon project left for delivery for Japanese company Chubu Electric Power.

Mike Wirth, a vice president at Chevron, said the delivery marked a milestone for a market in the Asia-Pacific that's expected to rely more on LNG as a fuels and energy option in the future.

"This is also important for our investors as we begin to generate revenue from a project we expect will operate for decades to come," he said in a statement.

The company reported a loss of $588 million for the fourth quarter, compared with year-on-year earnings of $3.5 billion. It was its first loss in more than 10 years and follows a workforce reduction in 2015 of around 2 percent.

Chevron's Gorgon project will eventually produce 15.6 million tons of LNG per year. The U.S. energy company said LNG is an "essential fuel" for markets across Asia.

British energy company BP, in a much-watched annual report published in December, said it expects China will become the largest importer of energy in the world by 2035.

Chevron has landed a string of LNG delivery deals in the Chinese market since December, when it signed with China Huadian Green Energy for the delivery of up to 1 million metric tons of LNG per year over 10 years, starting in 2020.

The cargo for Chevron was shipped by carrier Asia Excellence, one of the company's latest developments.

"To support Chevron's growing position as a leading LNG supplier, Chevron Shipping Company is in the final stages of its largest shipbuilding and fleet modernization program in recent history, which includes the addition of six new LNG carriers to its operated fleet," the company explained.

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