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Gorgon LNG to resume production

The US$54 billion Gorgon LNG project is set to recommence following the repair of mechanical problems.

Although Chevron has not announced the cost of the repairs, analysts estimate it to be approximately $200 million.

Chevron’s executive vice president technology, projects, and services divisions, Joe Geagea said despite the repair of the propane refrigerant shutting down the Barrow Island facility for almost two months, the ramp up schedules for its three processing lines have not changed.

“We’ve seen cost pressures on Gorgon,” Geagea said, “But at the moment, really, we’re not going to change the cost estimate that we have provided previously.”

“We expect to restart Train 1 in the next few weeks and resume LNG production within the 30 to 60 day estimate we provided previously,” he said.

He went on to say that trains two and three will be available in progressive six month intervals.

“We do acknowledge we’ve seen cost pressures. But at the same time, these have been offset by favourable foreign exchange (rates). We’re working very hard to mitigate those cost pressures,” he said.

“But for now, there’s really no reason to change our view on the cost. And again, Wheatstone is a huge resource base for us, and it is very important to deliver it.”

Each train has a capacity of 5.2 metric tonnes per annum, with Train 1 being increased to a production rate of 3.5 million tonnes of LNG per year.

Geagea added that Chevron’s other project, the two train 8.9mtpa Wheatstone, is expected to meet its LNG production date of mid 2017. Its offshore platform hook-up and nine development wells had been completed, with commissioning progressing on course.

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