TOKYO (Dow Jones)--Nippon Oil Corp. (5001.TO) and
Chevron Corp. (CVX) said separately Thursday that Nippon and Chevron's
Australian unit have signed an agreement for the sale of 4.5 million metric
tons of liquefied natural gas over 15 years, beginning in 2015, from
Chevron's Gorgon project in Western Australia.
Japan's largest oil refiner by capacity has been diversifying its business to
other energy resources, including LNG, coal and renewables, as Japan's oil
demand declines.
The company plans to build a new LNG receiving terminal at Hachinohe, a port
city in Aomori prefecture in northern Japan, where the 300,000 tons a year
LNG from Gorgon will be received if the draft agreement is finalized, Nippon
Oil said in a statement.
"We have discovered during research over the past few years that there
is a significant number of potential (Japanese) industrial customers who are
interested in switching to natural gas" to help reduce carbon dioxide
emissions, said Masami Hayashi, general manager of Nippon Oil's Gas Business
Department.
The company hopes to sell 600,000 tons a year of LNG from the Hachinohe
terminal, and will keep working to develop its customer base in the area,
Hayashi noted.
Slated to commence operations in April 2015, the terminal will comprise two
storage tanks each with a capacity of 140,000 kiloliters, a berth to
accommodate a large LNG carrier and a regasification facility, according to
Nippon Oil. The company will invest about Y50 billion in the terminal,
according to previous media reports.
Chevron is the 47% owner and operator of the A$43 billion Gorgon project,
which is expected to produce its first gas in 2014.
"We are working hard to deliver LNG from the Gorgon Project safely,
reliably and in an environmentally responsible manner to our customers in
Japan and Korea," Roy Krzywosinski, Chevron's Australian head, said in a
company statement.