Chevron Subsidiary Acquires Operating Interest in Western Canada LNG Project

Mon Dec 24, 2012 9:00am EST

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Proposed two-train project ideally located to meet rapidly growing Asia-Pacific
demand
SAN RAMON, Calif.--(Business Wire)--
Chevron Corporation (NYSE: CVX) today announced that its indirect Canadian
subsidiary, Chevron Canada Limited, will acquire a 50 percent operating interest
in the Kitimat liquefied natural gas (LNG) project and proposed Pacific Trail
Pipeline (PTP), and a 50 percent interest in approximately 644,000 acres of
petroleum and natural gas rights in the Horn River and Liard Basins in British
Columbia, Canada. 

"The Kitimat LNG development is an attractive opportunity that is aligned with
existing strategies and will drive additional long-term production growth and
shareholder returns," said George Kirkland, vice chairman, Chevron Corporation. 

"This investment grows our global LNG portfolio and builds upon our LNG
construction, operations and marketing capabilities. It is ideally situated to
meet rapidly growing demand for reliable, secure, and cleaner-burning fuels in
Asia, which are projected to approximately double from current levels by 2025." 

Under the terms of the agreements, Chevron Canada Limited will acquire all of
the interests currently owned by affiliates of EOG Resources Canada Inc. and
Encana Corporation in the proposed Kitimat LNG Project and PTP. Thereafter,
Chevron Canada Limited will equalize interests with an Apache Corporation
subsidiary, resulting in Chevron Canada Limited and Apache each holding a 50
percent interest in both the Kitimat LNG Project and PTP. Operatorship of both
facilities will transfer to Chevron Canada Limited. 

The proposed two-train Kitimat LNG Project, currently progressing through the
Front-End Engineering and Design (FEED) phase, has a Canadian National Energy
Board license to export 10 million tons per annum of LNG. 

Additionally, Chevron Canada Limited will acquire approximately 110,000 net
acres in the established Horn River Basin from Encana, EOG and Apache, and
approximately 212,000 net acres in the Liard Basin from Apache. Chevron Canada
Limited and Apache will each hold a 50 percent interest and Apache will operate
these two natural gas resource developments. 

The agreements are subject to regulatory reviews. 

Gary Luquette, president, Chevron North America Exploration and Production,
said, "This investment by Chevron Canada Limited captures significant resource
and acreage in proven and emerging natural gas basins in Canada, and is a key
opportunity to expand our overall North America exploration and production
portfolio. It will enable our North America operations to play an increasingly
important role in Chevron`s global growth." 

Jeff Lehrmann, president, Chevron Canada Limited, said, "We look forward to
working with the Governments of British Columbia and Canada, First Nations, and
local communities to grow this development, realize the project`s long-term
economic potential, and open new markets for Canadian natural gas." 

Chevron is one of the world`s leading integrated energy companies, with
subsidiaries that conduct business worldwide. The company is involved in
virtually every facet of the energy industry. Chevron explores for, produces and
transports crude oil and natural gas; refines, markets and distributes
transportation fuels and lubricants; manufactures and sells petrochemical
products; generates power and produces geothermal energy; provides energy
efficiency solutions; and develops the energy resources of the future, including
biofuels. Chevron is based in San Ramon, Calif. More information about Chevron
is available at www.chevron.com. 

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of
"Safe Harbor" Provisions of the Private Securities Litigation Reform Act of
1995.

Some of the items discussed in this press release are forward-looking statements
about Chevron and Chevron Canada Limited`s activities in Canada. Words such as
"anticipates," "expects," "intends," "plans," "targets," "forecasts,"
"projects," "believes," "seeks," "schedules," "estimates," "budgets," "outlook"
and similar expressions are intended to identify such forward-looking
statements. The statements are based upon management's current expectations,
estimates and projections; are not guarantees of future performance; and are
subject to certain risks, uncertainties and other factors, some of which are
beyond the company's control and are difficult to predict. Among the important
factors that could cause actual results to differ materially from those in the
forward-looking statements are changes in prices of, demand for and supply of
crude oil and natural gas; actions of competitors; the inability or failure of
the company`s joint-venture partners to fund their share of operations and
development activities; the potential failure to achieve expected net production
from existing and future crude oil and natural gas development projects;
potential delays in the development, construction or start-up of planned
projects; the potential disruption or interruption of the company`s net
production or manufacturing facilities or delivery/transportation networks due
to war, accidents, political events, civil unrest, or severe weather;
government-mandated sales, divestitures, recapitalizations, industry-specific
taxes and changes in fiscal terms or restrictions on scope of company
operations; foreign currency movements compared with the U.S. dollar; and
general economic and political conditions. The reader should not place undue
reliance on these forward-looking statements, which speak only as of the date of
this press release. Unless legally required, neither Chevron nor Chevron Canada
Limited undertakes any obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.

Chevron Corporation
Gareth Johnstone, San Ramon, +1 925-487-1306 

Copyright Business Wire 2012