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April 5, 2016

Chevron halts production at $54bn Gorgon project in Australia over mechanical problems

Chevron has halted production at its $54bn Gorgon liquefied natural gas (LNG) project offshore Australia due to mechanical issues.

Asia Excellence

Chevron has halted production at its $54bn Gorgon liquefied natural gas (LNG) project offshore Australia due to mechanical issues.

Production is expected to restart within 30 to 60 days, the company said.

The news follows Chevron’s announcement made in March that the first shipment of LNG from the Gorgon project departed Barrow Island. The first cargo is expected to be delivered to Chubu Electric Power in Japan.

Chevron said that there was a problem with the propane refrigerant circuit on the first production line, which is known as Train 1 at the Gorgon project.

The refrigerant system is used to turn natural gas into a superchilled liquid, which can be shipped later on.

Once all three trains are operational, Gorgon will have the capacity to produce 15.6 million tonnes of LNG per year.

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"Construction activities continue to progress on LNG Trains 2 and 3 with timing not affected by the work on Train 1."

Reuters quoted the company saying: "Train 1 ramp-up to full capacity is still expected to occur over six to eight months from initial start-up (in March) 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."

Once all three trains are operational, Gorgon will have the capacity to produce 15.6 million tonnes of LNG per year.

The Gorgon project is a joint venture between Chevron (47.3%), ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).

The project receives gas from the Gorgon and Jansz-Io gas fields located within the Greater Gorgon area, between 130km and 220km off the north-west coast of Western Australia.


Image: The Asia Excellence loading the first Gorgon LNG cargo for delivery into Japan. Photo: courtesy of Business Wire.

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