(EnergyAsia, January 22 2015, Thursday) — US major Chevron Corp said it has secured a five-year agreement to supply liquefied natural gas (LNG) from its US$54 billion Gorgon field in Australia to South Korea.

SK LNG Trading Pte Ltd, a division in the SK Group, will purchase a total of 4.15 million tons of the fuel from 2017.

Neither side disclosed pricing terms and conditions as the deal was recently concluded with crude oil prices hovering at near six-year lows. LNG cargoes sold to Asian destinations are mostly priced off crude on long-term agreements of 20 to 25 years.

The parties declined to reveal the pricing terms or why the supply agreement was for only five years, given the project’s high risk and cost.

“SK joins our existing strong LNG customer base and demonstrates the Chevron-led Gorgon and Wheatstone projects are well-placed to meet the growing demand for natural gas in the Asia-Pacific region,” said Roy Krzywosinski, Chevron Australia’s managing director.

The Chevron-operated Gorgon project is a joint venture of the Australian subsidiaries of Chevron (47.3%), ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).

The project combines the development of the Gorgon and nearby Jansz-Io gas fields, and downstream facilities now under construction on Barrow Island. This includes a LNG plant with three processing units capable of producing 15.6 million metric tons of the fuel per year, a carbon dioxide injection project and a domestic gas plant.

Separately, Chevron is also developing the Wheatstone project as an LNG and domestic gas operation near Onslow, in the Pilbara region of Western Australia. The project, which includes a domestic gas plant, will initially produce 8.9 million metric tons per year of LNG.