Chevron said Tuesday it has shipped fifty cargoes of liquefied natural gas (LNG) from its troubled Gorgon project in Western Australia since the start-up in March last year. The U.S -based energy giant also cautioned that an expansion of its Gorgon and Wheatstone projects, combined worth about $88 billion, is unlikely to take place due to the current market conditions.
Chevron’s two giant LNG projects have both suffered from cost blowouts and delays as the industry is going through one of the worst periods in decades. The oil price more than halved in the last three years from more than $100 per barrel in 2014 to under $50 a barrel now.
Developing large greenfield LNG projects is not economical anymore and the industry is shifting its focus to smaller developments, according to Nigel Hearne, Managing Director of Chevron Australia.
“The mega-projects of the past decade are giving way to smaller, more targeted investments with quicker economic returns,” Hearne said in his speech at an event in Perth.
“As it stands, there is unlikely to be another large greenfield LNG development in WA,” he said.
“What we do have is 11 trains of installed, world-class liquefaction capacity… and an opportunity to safely, reliably and competitively develop WA’s resources… estimated at more than 200 trillion cubic feet of discovered and undiscovered natural gas resources- off the north-west coast alone.”
Fifty cargoes for Gorgon
Chevron is currently in the commissioning process of the last – third train at its Gorgon facility on Barrow Island and expects to produce first LNG from the unit by the end of this month.
“It’s now 12-months since we farewelled Gorgon’s first LNG cargo… I’m pleased to say this month we produced our 50th Gorgon LNG cargo since production started,” Hearne said.
The troubled $54 billion Gorgon LNG project has experienced several production interruptions since it shipped its first cargo on March 21.
The LNG facility faced five production interruptions in March, July, two in November and the latest one at the end of February.
The LNG project will have a shipment capacity of 15.6 million mt/year once all three trains have ramped up to full production.
At Gorgon’s sister project, Wheatstone – located near Onslow – Train 1 construction is nearing completion and Chevron expects first LNG from the project around mid-year.
“Once Wheatstone is online, WA will be home to 11 LNG trains, with capacity of around 46 million tonnes of natural gas per annum,” Hearne said.
“We will also become Australia’s largest liquefaction infrastructure owner with 15.8 million tonnes per annum,” he added.
LNG World News Staff