LNG Production at Gorgon Temporarily Halted
Mechanical Issues Delay Ramp-Up, First Cargo Delivered
Perth, Western Australia, April 6, 2016 – Chevron Australia Pty Ltd today advised 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 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.
The propane refrigerant circuit is a closed system used to cool natural gas supplied to the plant. Work necessary to complete the repairs is ongoing while the site team continues equipment inspection and assessment. 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.
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.
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).
Chevron is one of the world’s leading integrated energy companies and through its Australian subsidiaries, has been present in Australia for more than 60 years. With the ingenuity and commitment of thousands of workers, Chevron Australia leads the development of the Gorgon and Wheatstone natural gas projects; manages its equal one-sixth interest in the North West Shelf Venture; operates Australia’s largest onshore oilfield on Barrow Island, is a significant investor in exploration offshore Australia and provides operational support to exploration assets operated by its affiliates in New Zealand.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Some of the items discussed in this press release are forward-looking statements about Chevron. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “may,” “could,” “should,” “budgets,” “outlook,” “on schedule,” “on track,” and similar expressions are intended to identify such forward-looking statements. The statements are based upon management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are changes in prices of, demand for and supply of crude oil and natural gas; the company’s ability to realize anticipated cost savings and expenditure reductions; actions of competitors; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates, particularly during times of low prices for oil and natural gas; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company's operations, net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather, cyber threats and terrorist acts; other natural or human causes beyond its control; changing economic, regulatory and political environment in Australia; government-mandated sales, divestitures, recapitalizations, industry-specific taxes and changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; material reductions in corporate liquidity and access to debt markets; general domestic and international economic and political conditions; and the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.