Chevron Corp., on Tuesday, said that its subsidiaries in Australia have entered into a non-binding Heads of Agreement with ENN LNG Trading Co. Ltd., a unit of ENN Energy Holdings Ltd, an energy distributor in China. As part of the deal, Chevron's Gorgon natural gas venture will sell liquefied natural gas to China.

On completion of the deal, ENN is anticipated to receive nearly 0.5 million metric tons an annum, MTPA, of liquefied natural gas for a time period of more than ten years. The delivery of LNG will be commenced in the first six-month of 2019, Chevron said.

Commenting on the deal, Executive VP of Chevron Mindstream and Development, Mike Wirth, said the agreement with ENN LNG highlights the growth of its gas business in Australia and also signifies further development with new LNG customers in China. Managing Director of Chevron Australia, Roy Krzywosinski, said that this agreement demonstrates the attractiveness of liquefied natural gas supply from the company's projects in Australia.

Chevron said that the shipment of LNG will signify nearly 3% of Gorgon's yearly production volume of 15.6 million tons. The company also noted that Osaka Gas, Chubu Electric Power, ExxonMobil and Tokyo Gas are among the partners in the Gorgon project.

According to Bloomberg, this agreement comes after Chevron's first deal in December to sell about 1 million tons of liquefied natural gas per annum to Huadian Green Energy Co in China. The Huadian agreement that begins in 2020 will assist Chevron to commercialize Australian gas business, Bloomberg said, citing the US producer.

The company said that the Gorgon project, which conglomerates the growth of Jansz-lo field and Gorgon field, is being constructed on the Barrow Island. The energy company reported that it is also constructing Wheatstone LNG project in Australia and its initial volume is anticipated to be 8.9 million tons per annum of LNG.

WorldOil quoted Krzywosinski as saying, "Gorgon will be a long-term supplier of natural gas to our customers in the Asia-Pacific region and in Australia, delivering energy security as well as significant long-term economic benefits to Australia for decades to come."

In 2015, worldwide LNG production touched 250 mmtpa, headed by the development in Australia, Forbes said citing a report by Wood Mackenzie. With 10 projects on hand, Australia will become the top LNG exporter in the world, Forbes added.

ENN's Zhoushan LNG is being built and it is anticipated to begin operation by 2018. ENN Energy Holdings Ltd. functions in 146 cities through 17 provinces, with more than 11.3 million residential and 52,000 commercial clients, Chevron said in its website.