Chevron 2007 Annual Report Supplement

Upstream Gas
Gas
Chevron’s global gas strategy is to commercialize the company’s equity gas resource base while growing a high-impact global gas
business. Significant progress was made in 2007 to connect the business and technical expertise across the entire natural-gas value
chain – production, liquefaction, transportation, regasification, marketing and power generation.
Business Strategies
> Pursue profitable growth in both liquefied natural gas (LNG) and gas-to-liquids (GTL).
> Continue to develop and manage profitable value-chain networks.
> Apply technology to reduce cost.
> Leverage the value-chain network and technology to access new natural-gas resources.
007 Activities
Angola LNG Angola LNG is an integrated natural-gas utilization project encompassing offshore and onshore operations to commercialize
natural-gas resources. At the end of 2007, Chevron and partners made a final investment decision for the project that will target
the U.S. markets for LNG sales. Construction of the LNG plant began in 2008. For information on significant project milestones, refer
to page 19.
Gorgon The Greater Gorgon LNG project comprises the development of natural gas production from properties in the Greater Gorgon
Area off the northwest coast of Australia and construction of LNG facilities on Barrow Island. For information on the development of
Greater Gorgon resources, refer to page 23.
EGTL The EGTL project in Escravos, Nigeria, is expected to produce approximately 34,000 barrels per day of GTL diesel, GTL naphtha
and a small amount of liquefied petroleum gas. During 2007, Chevron advanced site preparation and module construction. As of early
2008, approximately 90 percent of engineering and procurement activities had been completed. For more information on this project,
refer to page 22.
North America LNG Import Terminals During 2007, the company continued to make progress in securing additional access to the
North America natural-gas market through LNG import and regasification facilities:
• Sabine Pass Commissioning of the third-party Sabine Pass LNG terminal in Cameron Parish, Louisiana, was expected in second
quarter 2008. Chevron has contractual rights to 1 billion cubic feet per day of regasification capacity at the terminal beginning in
2009. Chevron also has a binding agreement to be one of the anchor shippers in a 3.2 billion-cubic-foot-per-day third-party pipeline.
Chevron will have 1.6 billion cubic feet per day of capacity in another third-party pipeline, of which 1 billion cubic feet per day is in
a new pipeline and 600 million cubic feet per day is interconnecting capacity to an existing pipeline. The new pipeline system will
provide access to Chevron’s Sabine and Bridgeline pipelines, which connect to the Henry Hub. The Henry Hub is the pricing point
for natural-gas futures contracts traded on the NYMEX (New York Mercantile Exchange) and is located on the natural-gas pipeline
system in Louisiana. Henry Hub interconnects to nine interstate and four intrastate pipelines.
• Casotte Landing In February 2007, the company received approval from the Federal Energy Regulatory Commission for a proposed
natural-gas import terminal at Casotte Landing in Jackson, Mississippi. The terminal is planned to be located adjacent to
Chevron’s Pascagoula Refinery and designed to process imported LNG for distribution to industrial, commercial and residential
customers in Mississippi, Florida and the Northeast. The terminal will be designed to have LNG capacity to deliver 1.3 billion cubic
feet of natural gas per day. The company continues to pursue additional permits. A decision to construct the facility is anticipated to
be timed to align with the company’s LNG supply projects.
North America Natural Gas Marketing and Trading Chevron ranks among the leading marketers of natural gas in North America
and has strong commercial relationships with utility and industrial customers and pipeline operators. The company’s sales of natural
gas in 2007 averaged approximately 8.2 billion cubic feet per day. With the anticipated growth in LNG imports to North America,
Chevron is well-positioned to help meet growing market demand.
North West Shelf (NWS) Venture LNG The 17 percent-owned NWS Venture is constructing a fifth LNG train as part of the expansion
of its onshore LNG facilities in Western Australia. The fifth LNG train, which is intended to increase the NWS Venture’s export capacity
by more than 4 million metric tons per year, to more than 16 million, was expected to be commissioned in late 2008. For more information
on this project, refer to page 24.
Olokola LNG In 2007, Chevron signed a shareholders agreement for a 19.5 percent interest in the OKLNG Free Zone Enterprise
(OKLNG), which will operate the Olokola LNG project. OKLNG plans to build a multitrain LNG facility and marine terminal in a free trade
zone east of Lagos. As of early 2008, technical and commercial work was in progress to optimize the final design. For more information
on the development of this project, refer to page 22.
Chevron Corporation 2007 Supplement to the Annual Report