Chevron Corp. signed a non-binding “heads of agreement” with China Huadian Green Energy Co. Ltd. for the long-term supply of liquefied natural gas (LNG).

Once this agreement is finalized, Chevron will have firm sales contracts for more than 80 percent of the LNG it will produce at its Gorgon and Wheatstone projects in Western Australia, a company spokesman told Platts.

Under the terms of the agreement, China Huadian will receive up to 1 million metric tons per annum of LNG for 10 years starting in 2020.

“This is an important step in the commercialization of Chevron’s natural gas holdings in Australia and the establishment of our global liquefied natural gas portfolio,” commented Pierre Breber, executive vice president, Chevron Gas and Midstream. “As Chevron continues to grow into one of the world’s largest LNG suppliers, this agreement represents further progress and diversification of our sales portfolio.”

The Gorgon Project is a joint venture of the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent). The first LNG cargo from Gorgon is expected to ship in early 2016.

The Wheatstone Project, an LNG and domestic gas operation, is a joint venture between the Australian subsidiaries of Chevron (64.14 percent), Kuwait Foreign Petroleum Exploration Co. (KUFPEC) (13.4 percent), Woodside Petroleum (13 percent) and Kyushu Electric Power Co. (1.46 percent), together with PE Wheatstone, which is part owned by Japan’s TEPCO (8 percent). The partners are aiming to ship the first LNG cargo from Wheatstone by the end of 2016.