Chevron Secures Long-Term Gas Supply Deal With Horizon Power

Chevron Corporation CVX, one of the world's leading integrated energy companies, has entered into a landmark agreement to supply approximately 14 petajoules of natural gas over five years to Horizon Power, the state-owned electricity provider serving remote and regional areas across Western Australia. This deal highlights Chevron's strategic commitment to domestic energy markets while strengthening the state’s electricity reliability and energy security.

Gas Supply Sources: Gorgon, Wheatstone and North West Shelf

Horizon Power’s supply will come from Chevron’s substantial equity holdings in three key gas projects in Western Australia: Gorgon, Wheatstone and North West Shelf. Both Gorgon and Wheatstone are operated by Chevron, while North West Shelf is currently managed by Woodside Energy Group Ltd, an Australian petroleum exploration and production company. Deliveries from this new agreement are scheduled to commence in 2027, ensuring a steady flow of gas to support local electricity generation.

President of Chevron Australia, Balaji Krishnamurthy, emphasized that the Horizon Power deal reflects its unwavering commitment to the domestic gas market. Gas continues to play a critical role in the state’s energy mix, providing flexible and reliable support to renewable energy sources during periods of intermittent generation.

Strategic Role of Gas in Western Australia’s Energy Mix

Gas functions as a flexible energy source capable of underpinning baseload electricity production while acting as a backup during weather-dependent disruptions to renewable energy. Chevron’s portfolio of equity and jointly held gas sales agreements positions it as the largest supplier of gas for electricity generation across Western Australia. Gorgon and Wheatstone alone provide more than 40% of the state’s gas supply, cementing Chevron’s central role in maintaining energy stability.

Gorgon Project: Capacity and Expansion

The Gorgon project, situated on Barrow Island, is a cornerstone of Chevron’s Australian operations. It features a domestic gas plant capable of processing 300 terajoules per day (TJd) and three LNG trains delivering a combined production capacity of 15.6 million metric tons per annum (MMtpa) of liquefied natural gas. The facility is supplied by the Gorgon and Jansz-Io offshore fields, leveraging advanced subsea infrastructure for efficient gas extraction and processing.

In December 2025, Chevron announced a $2.09 billion final investment decision for Gorgon Stage 3, which aims to develop the Geryon and Eurytion fields. This expansion will integrate these fields into existing subsea gathering and processing systems on Barrow Island, enhancing the project’s long-term production capacity and reinforcing Chevron’s commitment to domestic gas supply.

Wheatstone Project: Domestic Supply and LNG Production

Located along the Pilbara coast, the Wheatstone facility produces up to 200 TJd of gas for domestic consumption. It also operates two LNG trains with a total capacity of 8.9 MMtpa, processing gas from the Brunello, Iago, Julimar and Wheatstone offshore fields. The asset swap with Woodside in 2024 is expected to increase Chevron’s stake in Wheatstone, ensuring stronger control over this strategic project and its domestic supply contributions.

North West Shelf: Key Gas Processing Infrastructure

The North West Shelf project, managed by Woodside, includes two domestic gas processing trains and four LNG trains producing 14.3 MMtpa. Gas is sourced from offshore fields including Angel, Goodwyn, North Rankin and Perseus, with the project playing a vital role in Western Australia’s energy landscape. As part of the Chevron-Woodside asset swap, it will exit the North West Shelf by the second half of 2026, streamlining the operational focus on Gorgon and Wheatstone.

Chevron’s Strategic Commitment to Energy Security

This agreement with Horizon Power highlights Chevron’s strategic vision to ensure reliable and sustainable gas supplies for the Australian domestic market. By leveraging the extensive project portfolio and expanding infrastructure through initiatives like Gorgon Stage 3, Chevron is reinforcing its position as a central player in Western Australia’s energy transition.

Chevron’s long-term gas supply agreements, coupled with operational excellence across major projects, secure the state’s energy resilience while supporting the integration of renewable energy sources into the grid. Gas continues to act as a flexible, high-capacity complement to renewable energy, ensuring uninterrupted electricity delivery to communities and industries throughout the region.

Outlook for Western Australia’s Gas Market

With the Horizon Power agreement taking effect in 2027 and ongoing expansions at Gorgon and Wheatstone, Chevron is poised to strengthen Western Australia’s domestic energy infrastructure. The company’s focus on leveraging high-output LNG and domestic gas projects ensures the state benefits from consistent energy supply, economic growth and enhanced energy security.

Chevron’s proactive strategy, combined with innovative subsea and onshore processing solutions, solidifies its leadership in the region’s gas sector. By aligning production capacity with domestic demand, Chevron guarantees that Western Australia will maintain a stable and reliable energy mix, supporting both industrial development and community power needs for years to come.

CVX's Zacks Rank & Key Picks

Currently, CVX has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like TechnipFMC FTI, which sports a Zacks Rank #1 (Strong Buy), USA Compression Partners USAC and Nabors Industries NBR, currently holding a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

TechnipFMC is valued at $25.21 billion. It is a global energy technology company that provides subsea, surface, and offshore and onshore project solutions to the oil and gas industry. TechnipFMC specializes in integrated engineering, procurement, construction and installation services for complex energy developments.

USA Compression Partners is valued at $4.03 billion. It specializes in natural gas compression services, delivering vital infrastructure to support energy production. USA Compression Partners operates one of the largest fleets of compression equipment in North America, catering to a range of clients in the oil and gas industry.

Nabors Industries is valued at $1.16 billion. The company is a global leader in drilling rigs and associated services, focusing on both land-based and offshore drilling operations. With operations in more than 20 countries, Nabors Industries supports oil and gas exploration and production through innovative solutions and advanced technology.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research