MELBOURNE (Reuters) - Chevron Corp (N:CVX), which has been struggling to lock in long-term sales contracts for its Australian liquefied natural gas, said it has lined up South Korean conglomerate SK Group as a new customer from its $54 billion (36 billion pounds) Gorgon LNG project.
Chevron said SK LNG Trading, a subsidiary of SK Group, has agreed to buy 4.15 million tonnes of LNG over five years starting in 2017 from Gorgon.
"This agreement is an important step in the commercialization of Chevron's significant natural gas holdings in Australia," Pierre Breber, president of Chevron gas and midstream, said in a statement.
With this deal, Chevron said over the five years from 2017, more than three-quarters of its share of LNG from Gorgon would be going to customers in Asia. Gorgon is due to start producing this year.
A Chevron spokeswoman in Australia declined to comment on pricing terms on the contract or whether terms had changed relative to other Gorgon contracts in the wake of a 60 percent slide in oil prices over the past seven months.
Asian buyers have been reluctant to sign up to the more traditional 20 year contracts, with competition from LNG exports from the United States due to begin in 2015, creating uncertainty for Australia's mega projects.
Australian LNG contracts to Asian customers have typically been linked to oil prices, which has raised doubt about the profitability of nearly $200 billion worth of Australian LNG projects set to start exporting between between late 2014 and 2017.
Chevron is 47.3 percent owner and operator of the massive Gorgon project. Its partners are ExxonMobil Corp (N:XOM), Royal Dutch Shell Group (L:RDSA), Osaka Gas (T:9532), Tokyo Gas (T:9531) and Chubu Electric Power (T:9502).
The U.S. giant also owns a 64 percent stake in the Wheatstone LNG project under construction in Australia.