Chevron kicks off production at Gorgon LNG

Oil and gas giant Chevron said on Monday it started producing liquefied natural gas at its Gorgon LNG project on Barrow Island off the northwest coast of Australia. 

The company said in its statement that the first cargo of chilled gas is expected to leave the US$54 billion project next week.

“The long-term fundamentals for LNG are attractive, particularly in the Asia-Pacific region,” as Chevron is looking to become a major LNG exporter by 2020, Chairman and CEO John Watson, said.

Watson noted that 80 percent of Gorgon LNG production as well as the output from its second project under construction, the Wheatstone LNG project, is under long-term contracts.

The project began the cool-down process in mid-January when the Chevron-operated LNG carrier, Asia Excellence delivered the commissioning cargo.

It uses gas from the Gorgon and Jansz-Io fields located off the coast of Western Australia. The onshore plant on Barrow Island has the capacity to produce 15.6 million tons of LNG per year and 300 terajoules of gas per day for the Western Australia market.

The project is operated by Chevron that owns a 47.3 percent stake, while other shareholders are ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent).

Australia to become world’s largest LNG exporter?

Australia has taken another significant step towards becoming the world’s largest exporter of LNG with first production from the Gorgon project, APPEA Chief Executive Malcolm Roberts said in a statement on Monday.

“Gorgon is the largest single resource project ever developed in Australia and one of the world’s largest natural gas projects,” Roberts said.

The economic benefits to Australia during its construction “have been enormous – more than 10,000 direct jobs and more than $34 billion spent on local goods and services“.

“But the long-term benefits will be even greater. Gorgon is expected to generate GDP growth of more than $440 billion over the next two decades of operations and additional federal revenue of around $69 billion,” Roberts said.

According to Roberts, Australia was reaping the benefits of $200 billion worth of new investment that would see LNG exports surge from 30 million tonnes last year to more than 85 million tonnes by 2020.

Four new LNG projects have entered production since 2014 (Queensland Curtis LNG, Gladstone LNG, Australia Pacific LNG and Gorgon) and another three are still under construction (Prelude Floating LNG, Wheatstone and Ichthys).

The industry’s growth has put Australia on track to overtake Qatar as the world’s largest exporter of the chilled fuel in 2018, Roberts added.

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LNG World News Staff