Gorgon LNG Plant to Restart Within Sixty Days


By Reuters 2016-04-07 19:12:01

Australia's Gorgon LNG export terminal is expected to resume production within 30 to 60 days after the facility halted output due to mechanical problems, operator Chevron said on Wednesday.

Chevron's $54-billion project began producing LNG for export on March 7, but has since had trouble with a cooling unit, preventing the plant from turning natural gas into a super-chilled liquid to be shipped on tankers.

"A restart of the plant within 30-60 days is estimated at this time," the company said in a statement.

"Train 1 ramp-up to full capacity is still expected to occur over 6 to 8 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," the company said.

Gorgon's first cargo, which was shipped in March, arrived at its destination with Japanese utility Chubu Electric on Wednesday, a Chevron spokesman said separately.

The Gorgon Project on Barrow Island off the northwest coast of Western Australia 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).

Gorgon will have the capacity to produce 15.6 million tons of LNG per year once all three production trains are operating.

Traders said the outage might temporarily support Asian spot LNG prices, which have dropped by 80 percent from peaks hit in 2014 as soaring supplies clash with slowing demand from the world's top buyers Japan, South Korea and China.

Gorgon was initially expected to cost $37 billion and start exports in 2014, but delays and soaring costs pushed the start-date back and the price tag up.