Chevron will idle the second production unit at its Gorgon LNG project in May to carry out modifications already implemented at the other two units, a senior executive said April 30.
Pat Yarrington, Chevron’s vice president and chief financial officer, said in an earnings call on April 27 that Gorgon Train 2 in Australia has a planned “pit stop” in May for crews to replicate performance improvement modifications.
Traders said the maintenance is expected to last 30 days.
The work will focus on remedying vibration problems already fixed on Trains 1 and 3, they said.
A company spokesman declined to comment on the maintenance duration or the issues being addressed.
Meanwhile, work on Chevron’s second Australian LNG mega-project in Australia, at Wheatstone, is progressing, Yarrington said.
LNG production at Wheatstone’s first train started in October 2017. The company expects to start LNG production from the second train this quarter, Yarrington said, bringing the facility to its annual target output of 8.9 million tonnes.
Chevron also plans to exploit global gas supply deficits forecast early in the next decade by boosting production from existing trains at Gorgon and Wheatstone through a process known as debottlenecking, vice-president of midstream Mark Nelson said.
“Only the most cost-competitive projects will be able to move forward in this space and we will be very disciplined with our investment and will fund only those projects that will generate top returns,” he said, adding it was premature to consider building entirely new trains.
Boosting output via low-cost debottlenecking could improve Gorgon and Wheatstone profit margins which, burdened by among the highest per metric tonne cost of production, struggle in the low-price environment.
Asian spot LNG prices for June delivery are trading at $7.95 per mmBtu, compared with a range of $12-20 per mmBtu between 2011 and 2015.
Recommended Reading
Exxon Mobil Green-lights $12.7B Whiptail Project Offshore Guyana
2024-04-12 - Exxon Mobil’s sixth development in the Stabroek Block will add 250,000 bbl/d capacity when it starts production in 2027.
Deepwater Roundup 2024: Americas
2024-04-23 - The final part of Hart Energy E&P’s Deepwater Roundup focuses on projects coming online in the Americas from 2023 until the end of the decade.
Exxon Ups Mammoth Offshore Guyana Production by Another 100,000 bbl/d
2024-04-15 - Exxon Mobil, which took a final investment decision on its Whiptail development on April 12, now estimates its six offshore Guyana projects will average gross production of 1.3 MMbbl/d by 2027.
E&P Highlights: Feb. 16, 2024
2024-02-19 - From the mobile offshore production unit arriving at the Nong Yao Field offshore Thailand to approval for the Castorone vessel to resume operations, below is a compilation of the latest headlines in the E&P space.
Deepwater Roundup 2024: Offshore Australasia, Surrounding Areas
2024-04-09 - Projects in Australia and Asia are progressing in part two of Hart Energy's 2024 Deepwater Roundup. Deepwater projects in Vietnam and Australia look to yield high reserves, while a project offshore Malaysia looks to will be developed by an solar panel powered FPSO.