Chevron: Gorgon faces up to 60 days of shutdown

Chevron informed on Wednesday that liquefied natural gas (LNG) production at the Gorgon Project on Barrow Island off the northwest coast of Western Australia has been temporarily halted due to mechanical issues and a restart is expected within 30-60 days. 

The mechanical issue is with the propane refrigerant circuit on Train 1 at the plant site.

Start-up of Train 1 and associated infrastructure is well advanced with first LNG production achieved on March 7 and production peaking at nearly 90,000 barrels of oil equivalent per day. The first LNG cargo departed Barrow Island on March 21 and has been delivered to Chubu Electric Power in Japan today, April 6, 2016.

The propane refrigerant circuit is a closed system used to cool natural gas supplied to the plant. Chevron stated that the work necessary to complete the repairs is ongoing while the site team continues equipment inspection and assessment. The company also added that, based on initial findings, the repair work is of a routine nature and all the necessary equipment and material is available on site. A restart of the plant within 30-60 days is estimated at this time, Chevron said.

The West Australian, a daily newspaper, recently reported, citing unnamed sources, that it would take more than a $100 million to repair the mechanical issues. The newspaper further said that this “teething problem” means the second LNG shipment was not expected to sail away before the end of April.

The company added that Train 1 ramp-up to full capacity is still expected to occur over 6 to 8 months from initial start-up of the facility. Meanwhile, construction activities continue to progress on LNG Trains 2 and 3 with timing not affected by the work on Train 1, Chevron said.

The Chevron-operated 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).

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