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After False Start, Chevron to Resume Gorgon LNG Production

U.S. energy giant Chevron said it expected to resume production at the Gorgon liquefied natural gas (LNG) project off the coast of Western Australia later this month after finishing up repairs that had seen the plant shut down after only it first shipment.

Production at the massive Gorgon project launched just over a month ago after a six-year construction period; however, mechanical problems in the propane refrigerant system has seen production halted right out of the starting gates.

Joseph Geagea, executive vice-president, technology and projects, said Chevron expected to reach full production at the first train within six to eight months, with the second and third trains starting six and, respectively, 12 months later.

Related: The Merger That Could Create a New Oil Major

"Repairs to this equipment are nearing completion, and we are in the process of reinstating the propane refrigerant circuit. 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," Mr Geagea said.

The $54-billion Gorgon Project was constructed on Barrow Island, some 60 kilometers off the northwest coast of Western Australia. The project is a joint venture between 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).

Also in May, Chevron said it expected to resume exports from its Angola LNG plant at Soyo after a two-year shutdown. Operations at the 5,2 million t/yr plant were suspended in April 2014, following a safety investigation into a pipeline rupture that caused a hydrocarbon vapor release.

Related: Why China Is Really Dictating the Oil Supply Glut

The US company owns a 36.4 percent stake in Angola LNG, alongside state-owned Sonangol with 22.8 percent, and BP, Total and Italy's Eni with 13.6 percent each. The plant has seven dedicated 160,000m³ vessels — the Cubal, Lobito, Malanje, Soyo, SonangolBenguela, SonangolEtosha and SonangolSambizanga.

The news of a resumption of these shipments comes at an awkward time for Chevron. On Friday, Chevron announced it would be cutting another 1,000 jobs, and posted a first quarter loss of $725 million. With these new cuts, Chevron will have cut a total of 8,000 workers, or 12 percent of its workforce.

By James Burgess of Oilprice.com

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  • Bassam El Wazni on May 22 2016 said:
    I doubt that Chevron will be able to restart the plant. Chevron's (Angola) Soyo LNG plant is off line for three years and unable to put it online. Sam Simon wrote that Soyo LNG plant was a small fart but he expected that Gorgon LNG to be the biggest fart in LNG projects history.

    Chevron Should acknowledge that they lack of skills and expertise to operate LNG plants and should hand over the operations of this project to other partners such as Shell or Exxon mobile.

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