Page 9 - GLNG Week 02 2021

GLNG COMMENTARY GLNG

Ups and downs for LNG in Australia

Chevron has reported finding weld quality issues at a second train at its Gorgon LNG project,

while Shell has restarted production at Prelude FLNG after an almost year-long outage

PROJECTS & LNG-RELATED news from Australia has been support Gorgon, but documents obtained by
COMPANIES mixed in recent days. While Chevron is dealing Western Australian independent energy news
with more issues and repairs at Gorgon LNG website Boiling Cold have revealed that the
WHAT: in Western Australia, Royal Dutch Shell has facility has not been working as it should.
Shell and Chevron have returned its giant Prelude floating LNG (FLNG) Sand is reported to be clogging the injection
reported good and bad project to service. Prelude had been offline for system, which is designed to bury up to 4mn
news respectively from around a year. tonnes per year (tpy) of carbon dioxide (CO2)
their Australian LNG Both developments illustrate the complexity under Barrow Island. Instead, more CO2 is
projects. of LNG megaprojects. In addition, the ongoing being vented into the atmosphere.
outage at Gorgon is thought to be contributing According to the Boiling Cold report, which
WHY: to the spike in Asian LNG spot prices as buyers has since been picked up by international media,
Chevron found weld contend with higher-than-expected demand the Western Australian Department of Mines,
quality issues at a second and certain supply bottlenecks. Industry Regulation and Safety (DMIRS)
train at Gorgon LNG, allowed Chevron to begin injecting CO2 in
while Shell has restarted Weld woes August 2019 without the pressure manage-
Prelude FLNG. Chevron said last week that an inspection of ment system, provided it started operating by
Train 1 at Gorgon LNG, which is located on Bar- December 2019. It subsequently granted a series
WHAT NEXT: row Island, had resulted in weld quality issues of extensions to this deadline, and Chevron now
Outages at Australian being identified. These are similar to the weld has until June 2021 to fix the system. However,
LNG terminals are quality issues that kept Train 2 at Gorgon offline this time the DMIRS capped the amount of CO2
contributing to a spike for months in 2020, and are likely to take at least Chevron could inject in the meantime, leading
in Asian spot prices for several weeks to repair, though Chevron has not to more CO2 being vented. The cap has not been
the fuel. confirmed a date for returning Train 1 to service. disclosed.
The discovery has raised expectations that Western Australia’s state government has
Train 3 will also have similar issues that will come under fire from environmental groups for
need to be repaired once Train 1 is back online. not imposing penalties on Chevron and its part-
The third train was already scheduled to be ners in Gorgon over the malfunctioning of the
taken offline for inspection prior to the issues CCS facility. Indeed, The Conservation Council
being identified on Train 1. of WA said Chevron should be forced to shut the
The faulty welds were found on propane heat plant down until it can demonstrate its CCS sys-
exchangers – also known as kettles – that are tem was working. Chevron, for its part, main-
used in the liquefaction process. The Australian tains that the CCS facility is working safely and Pull quote to go
Financial Review reported that all of the kettles that the company is committed to meeting its
across Gorgon’s three trains were manufactured regulatory obligations. in here Pull quote
by the same company in South Korea. The CCS project is the largest in the world, to go in here Pull
Chevron first discovered the weld quality and the ongoing challenges with it comes as
issues on Train 2 during scheduled maintenance CCS is increasingly being looked at as a major quote to go in
in July 2020. The super-major was initially aim- component of the energy transition and decar-
ing to return the train to service in September, bonisation. While the technology is evolving here Pull quote
but repairs took longer than expected and it and being honed, Chevron’s CCS struggles may
came back online in November. give other would-be developers of the technol- to go in here Pull
Upon returning Train 2 to service, Chevron ogy cause for concern. quote to go in
shut down Train 1 to inspect its kettles for sim-
ilar issues. The super-major hopes that its expe- Floating giant here.
rience with carrying out repairs on Train 2 will Shell, meanwhile, had more positive news to
help to speed up the process at Train 1 – and also report as it returned its giant Prelude floating
Train 3 if necessary. LNG (FLNG) project to service. The facility – the
This is not the only challenge Chevron is largest floating structure ever built – had been
facing at Gorgon, though. Separately, environ- offline for almost a year owing to a technical dis-
mental groups are calling on the plant to be shut ruption to its diesel generators that illustrates the
down altogether because of its rising greenhouse complexity of FLNG technology.
gas (GHG) emissions. Chevron has a carbon Analysts have said that the remote location
capture and storage (CCS) project operating to of the Prelude facility, 475 km off Australia’s

Week 02 15•January•2021 www. NEWSBASE .com P9