Chevron Considers Argentina and Mediterranean Expansion as LNG Portfolio Grows

Chevron (NYSE:CVX) is assessing opportunities to expand its global natural gas portfolio in regions including Argentina and the eastern Mediterranean as buyers place greater emphasis on energy supply diversification, according to President of Global Gas Freeman Shaheen.

Global gas markets have faced supply disruptions following the start of the Ukraine war in 2022 and the Iran conflict this year, affecting supplies from Russia and Qatar and contributing to higher liquefied natural gas prices.

“What we’re seeing from this crisis is that it just reinforces the need for diversity — diversity of supply and diversity of different contracting structures,” Shaheen said, adding, “and not leaving yourselves susceptible to a spot market that’s not really as liquid as crude and products.”

Chevron Targets LNG Supply Capacity of About 20 Million Tonnes

Chevron expects to have about 20 million metric tonnes per annum of LNG supply capacity. This comprises 16 million tonnes of net gas production from its projects and another 4 million tonnes contracted from the US Gulf Coast.

The Gulf Coast supply began in February and is expected to increase over the next several years in line with existing agreements.

“We’re looking to continue to expand that portfolio,” Shaheen said in an interview during the Gastech conference in Bangkok.

“There’s great prospects out of Argentina with the development of crude and gas in that marketplace. The East Mediterranean is a very exciting area for us as well.”

Chevron is also assessing opportunities in Australia and Africa, subject to capital requirements and fiscal and regulatory conditions.

Shaheen did not identify specific potential projects in Africa, Australia or the eastern Mediterranean. In June, Chevron received approval to become operator and lead gas exploration at an offshore block near Greece.

Projects to Compete for Chevron Capital

Potential gas investments will be considered alongside other opportunities in Chevron’s portfolio, including Venezuela, where the company and its partners could invest more than $7 billion to more than double oil production by 2031.

“I’ve been hearing that Venezuela has a lot of capital that’s going to have to go that way coming up,” Shaheen told Reuters.

“Everything is going to get analysed in our project queue and it gets ranked.”

Chevron already has substantial LNG operations in Australia, where it operates the Gorgon and Wheatstone projects. A significant proportion of its Australian LNG supply is sold to Japan.

“Japan continues to be our home base, and we have nice structural opportunities into Singapore,” Shaheen said, adding that China and South Korea also remain markets of interest.

Chevron agreed in 2024 to supply Singapore’s Sembcorp Industries with up to 0.6 million tonnes per annum of LNG beginning in 2028.

Chevron Sees Potential for LNG Agreement in India

Shaheen said LNG purchasing practices are also changing, with state-backed importers increasingly willing to enter contracts with portfolio suppliers rather than relying solely on government-to-government agreements.

India is among the markets where Chevron is seeking potential supply opportunities, although Shaheen cited pricing as a consideration in reaching an agreement.

“I’d love to have a deal in India. It’s just they’re very, very headline-price driven,” Shaheen said. “I think India is still evolving. There’s going to be great opportunities over time.”

Chevron stock price