Chevron Corporation (CVX - Free Report) recently inked a deal with BHP’s (BHP - Free Report) Nickel West business in Australia. Per this gas sales agreement, the company will supply BHP Nickel West with a total of 22 Petajoules of equity domestic gas over the 3.5-year term of the contract from its Wheatstone gas facility.
Western Australia already holds a dominant position for its strong domestic gas supply capacity and this latest contract will further fortify its global footing. Per Paul Everingham, chief executive of Chamber of Minerals and Energy of WA, easy availability of dependable and cost-effective energy resources will improve WA’s economy, which was necessary in the wake of the COVID-19 adversity.
Wheatstone project is an endeavor, jointly run by Chevron (operator, 64.14 %), Woodside (13 %), KUFPEC (13.4%), PE Wheatstone (partly-owned by JERA, 8%) and Kyushu Electric Power Company (1.46%).
Chevron-operated Gorgon and Wheatstone natural gas plants are estimated to produce 500 terajoules of domestic gas per day for the Western Australian market, which is sufficient to generate electric power for 4.3 million households.
Apart from the Gorgon and Wheatstone natural gas stations, Chevron owns 16.67% stake in the North West Shelf project in Australia, which it plans to divest to some prospective buyer.
Management at this San Ramon, CA-based company believes that this is the correct time to sell the North West Shelf project and watch out for fair value bids from potential buyers as the project is in a phase of transition at the moment. The North West Shelf development is looking to open its services to new suppliers. As of now, the project is selling gas owned by just the project partners. This will allow the project to shift toward becoming a globally competitive third-party tolling facility. Apart from Chevron, companies, namely BP Plc (BP - Free Report) , Royal Dutch Shell Plc (RDS.A - Free Report) , BHP Group and Japan Australia LNG, which is Australia’s first LNG development, hold interests in the North West Shelf project.
About the Company
Chevron is one of the largest publicly-traded oil and gas companies in the world with operations spread to almost every corner of the globe. A component of the Dow Jones Industrial Average, this presently Zacks Rank #2 (Buy) Chevron is a fully-integrated entity, participating in every energy-related area, ranging from oil production to refining and marketing. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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