Chevron, as one of the largest players in the global gas industry, has announced its plans to expand its global gas assets. Freeman Shaheen, the head of the global gas division at the company, announced its plans to expand activities from Argentina to the Mediterranean region during the Gastech conference in Bangkok, highlighting the increasing global demand for gas.
Recent Disruptions in the Gas Market
Global gas markets have experienced two major disruptions in the past four years, including the Ukraine war in 2022 and tensions in the Middle East this year. These disruptions have led to a reduction in gas supply from major producers such as Russia and Qatar, increasing the price of liquefied natural gas (LNG). Shaheen pointed out these issues, stating: "The message of these crises is a renewed emphasis on the necessity of diversifying supply sources and contractual structures."
He also emphasized the need to avoid dependence on the volatility of the spot market for single cargoes, adding that this market does not have the liquidity of the crude oil and petroleum products market.
Capacity Increase and New Opportunities
According to available information, Chevron plans to increase its LNG supply capacity to about 20 million tons per year. This includes 16 million tons of net gas production from the company's projects and 4 million tons of gas from the coastal region of the Gulf of Mexico in the United States. This contract began in February of this year and the amount will increase in the coming years.
Shaheen mentioned the opportunities for developing oil and gas fields in Argentina, stating: "There is a very good outlook in this country. The Eastern Mediterranean region also has very attractive potential." He also referred to the opportunities available in Australia and Africa but emphasized that these projects must provide suitable capital, financial, and regulatory conditions.
Chevron expanded its presence in the Eastern Mediterranean in June by receiving a permit to conduct gas exploration operations in a maritime block in Greek waters. However, these opportunities must be evaluated in comparison to the existing conditions in Venezuela. Chevron and its partners plan to invest over $7 billion in Venezuela and increase oil production to more than double by 2031.
Additionally, Chevron is executing major projects such as "Gorgon" and "Wheatstone" in Australia, with part of the company's supply being exported to Japan. Shaheen highlighted the importance of the Japanese market, stating: "Japan remains our primary destination." He also spoke about suitable opportunities for operations in Singapore and attractive markets in China and South Korea.
Chevron has signed a contract with Singapore in 2024 to supply up to 600 million tons of LNG per year for Sembcorp Industries starting in 2028. Shaheen concluded by mentioning changes in the way LNG buyers source their supplies, stating that government importers are increasingly inclined to sign contracts with suppliers instead of relying on government agreements.
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