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To: isopatch who wrote (88986)	3/21/2001 11:37:18 AM
From: isopatch	Respond to of 95453

Chevron's N.A. LNG plan: From Bloomberg. "03/20 22:54 Chevron May Spend Up to $400 Mln on U.S. Gas Terminal (Update1) By Thomas Hogue San Francisco, March 21 (Bloomberg) -- Chevron Corp., the second-largest U.S. oil company, said it may spend as much as $400 million building a terminal for importing liquefied natural gas from Australia to America. Chevron said it is considering sites onshore and offshore California and northwest Mexico for a 3.8 million metric ton-a- year terminal to receive LNG and convert it back to gas for power generation. Chevron and other Australian gas producers are considering such shipments because of a shortage of the fuel and record high U.S. gas prices, which have contributed to rising power generation costs and the near bankruptcy of electricity distributors in California, the most populous U.S. state. ``We believe the fundamentals are there, or we wouldn't be going ahead at this point,'' said Fred Gorell, a Chevron spokesman in San Francisco. Chevron is conducting a six-month study to see if gas prices will remain at levels that will support the gas shipments. Since Jan. 1, 2000, natural gas prices on the New York Mercantile Exchange averaged more than double the average price for the previous 10 years. They rose 53 percent in December to a 10-year high of $10.10 per million British thermal units on concern U.S. inventories were too low for winter. Tuesday, natural gas for April delivery, the most active contract, fell $0.017 to $5.270 per million BTUs. Australian LNG, which markets gas from Australia's North West Shelf project, the country's only LNG exporter, is also looking at the U.S. West Coast market, said company President Arthur Dixon Tuesday. ``It's a little like a light coming on and all the moths going towards it,'' said Dixon. ``We are certainly looking at the U.S. -- we've got gas, they want it.'' Australia Two other gas producers in Australia have said they will begin such shipments in 2005. Woodside Petroleum Ltd. and Philips Petroleum Co. said March 9 they signed a 20-year accord to supply California and Mexico with LNG worth about $20 billion from the Timor Sea, north of Australia. Chevron has 15 trillion cubic feet of proved and probable gas reserves in the North West Shelf and the Gorgon gas field offshore Western Australia, said Gorell. Chevron's Australian reserves will increase if U.S. regulators approve its purchase of Texaco Inc., a partner in the Gorgon field. Chevron agreed to buy Texaco for $44.8 billion in stock and assumed debt last October. Chevron said yesterday the ``best-case scenario'' is that its merger will close by June. The company's partners in the North West Shelf gas project are Woodside, BHP Ltd., Royal Dutch/Shell Group, BP Amoco Plc and Japan Australia LNG Pty., owned by Mitsubishi Corp. and Mitsui & Co. The Gorgon field off the Western Australia state coast is owned by Chevron, Texaco, Exxon Mobil Corp. and Shell, and is estimated to contain as much as 21.5 trillion cubic feet of gas, enough to supply current Asia Pacific demand for more than two years."