Chevron said a non-binding agreement to supply China with liquefied natural gas is a milestone for the commercialization of its energy portfolio in Australia.

Chevron signed a non-binding agreement with China Huadian Green Energy for the delivery of up to 1 million metric tons of LNG per year over 10 years, starting in 2020.

Roy Krzywosinski, a managing director for Chevron operations in Australia, said the agreement would help boost the company's sales portfolio.

"We welcome the opportunity to supply LNG to China Huadian and look forward to building lasting relationships with our customers in the region as the Chevron-operated Gorgon and Wheatstone projects move into operations," he said in a statement.

China's economy is taking on more energy reserves as its expansion outpaces rival economies in the global market. While growing at a slower pace than in previous years, the International Monetary Fund said in early December it was adding the Chinese yuan to its basket of currencies as recognition for strides toward a more open and market-based economy.

British energy company BP, in a much-watched annual report, said it expects China by 2035 will become the largest importer of energy in the world. China's Huadian Group, meanwhile, is one of the largest state-owned power companies in the country.

Chevron's Gorgon project will eventually produce 15.6 million tons of LNG per year. The Wheatsone project has an initially capacity of 8.9 million tons of LNG per year.

Chevron in mid-December said its spending plan for 2016 of $26.6 billion was about a quarter less than total expected investments for 2015.