Chevron: first LNG from Gorgon “within few weeks”

US-based energy giant Chevron said Friday it expects to start production at its US$54 billion Gorgon LNG project in Australia soon.

“We made significant progress on our LNG projects in Australia, in particular the Gorgon project where we expect to be producing LNG within the next few weeks,”  Chevron’s CEO John Watson said in the company’s fourth-quarter statement.

Chevron recently commenced the cool-down of the LNG storage and loading facilities at its Gorgon project on Barrow Island in Western Australia.

The Gorgon 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).

Fourth-quarter loss

Chevron reported a fourth-quarter loss of $588 million, compared with earnings of $3.5 billion in the 2014 fourth quarter.

Foreign currency effects increased earnings in the fourth quarter by $46 million, compared with an increase of $432 million a year earlier.

Full-year 2015 earnings were $4.6 billion compared with $19.2 billion in 2014, Chevron said.

Sales and other operating revenues in fourth quarter were $28 billion, compared to $42 billion in the year-ago period.

“Our 2015 earnings were down significantly from the previous year, reflecting a nearly 50 percent year-on-year decline in crude oil prices,” said Watson.

According to Watson, operating expenses and capital spending were reduced $9 billion in 2015 from 2014, and the CEO expects similarly large reductions again in 2016.

Watson said that the company added approximately 1.02 billion barrels of net oil equivalent proved reserves in 2015. These additions equate to approximately 107 percent of net oil-equivalent production for the year.

The largest additions were from production entitlement effects in several locations and drilling results for the Permian Basin in the United States and the Wheatstone LNG project in Australia.