Chevron's Gorgon LNG project struggles to lock in buyers

|About: Chevron Corporation (CVX)|By:, SA News Editor

Chevron (NYSE:CVX) is struggling to lock in 20-year sales contracts for its Gorgon liquefied natural gas export plant in Australia, Reuters reports, as buyers hold out for cheaper deals.

Gorgon and other gas projects worth nearly $200B are nearing completion in Australia, with seven LNG projects due to start exporting gas between late 2014 and 2017, but with LNG exports from the U.S. due to begin next year, wary Asian buyers are holding off on long-term contracts.

The $54B Gorgon project is expected to start up in mid-2015 but so far has locked in sales for just 65% of its share of capacity, which leaves it highly exposed to the risk of falls in the spot price.

Aside from Gorgon, other Australian projects include BG's (OTCPK:BRGXF, OTCQX:BRGYY) Curtis Island, Conoco (NYSE:COP) and Origin's (OTC:OGFGF) Australia Pacific and Shell's (RDS.A, RDS.B) Prelude.