Page 10 - GLNG Week 34

GLNG COMMENTARY GLNG

brought forward as a result of the issues Chev- JERA, Eneos – formerly JX Nippon Oil &
ron is having at Train 2. Energy – Tokyo Gas, Kyushu Electric and Osaka
Gas, China’s PetroChina, India’s Petronet, South
What next? Korea’s SK and GS Caltex and UK-listed BP.
Chevron has noted that it continues to meet its Chevron owns a 47.3% operating interest in
contractual requirements to deliver gas to both Gorgon, while ExxonMobil and Shell each have
domestic and overseas customers despite the loss 25% stakes. The remaining interest is shared by
of output resulting from ongoing maintenance at minority partners Osaka Gas with 1.25%, Tokyo
Train 2. Based on each train’s nameplate capacity Gas with 1% and JERA with 0.417%.
of 5.2mn tpy and a cargo size of 60,000 tonnes, The issues with Train 2 – and potentially the
the outage at Train 2 since July 11 – the day it other trains – at Gorgon are the latest challenge
was originally supposed to return to service after for the facility, which had a long and troubled
scheduled maintenance – has resulted in 12-13 construction period and slow start-up. How-
lost cargoes. Now, the super-major is preparing ever, it had been running more smoothly until
for further lost output during the inspections at the weld issues at Train 2 were discovered.
Trains 1 and 3. The fact that the repairs can seemingly be
According to two Singapore-based LNG carried out without replacing the kettles is a
traders cited by Reuters, Chevron has informed welcome development for Chevron. And the Chevron has
Gorgon customers that it can supply them from super-major’s plan to stagger the train closures
the Wheatstone and North West Shelf LNG appears to suggest at least reasonable confidence noted that it
plants instead while work on the trains is being that if there are indeed similar issues at Trains 1 continues to meet
carried out. And Argus Media cited members and 3, the scale of repairs required will be sim-
of the industry as suggesting that Chevron and ilar to what are currently underway at Train 2. its contractual
Gorgon partners ExxonMobil and Royal Dutch Asian LNG spot prices had been rising on
Shell may have collectively bought 20 spot car- speculation that the entire Gorgon plant would requirements to
goes as replacement for lost output at the plant. need to be shut down, but analysts said this week
Argus further reported that industry partic- that news of the staggered closure would pre- deliver gas to
ipants had said Chevron bought a cargo load- vent them from increasing further. And indeed, both domestic
ing from Wheatstone over October 6-10 from the Japan Korea Marker (JKM) dipped in recent
Kuwait Foreign Petroleum Exploration Co. days after climbing to a recent peak of $4.23 per and overseas
(KUFPEC) through a tender that closed on million British thermal units ($117.00 per 1,000
August 19. This is in line with comments made cubic metres) on August 18. customers.
the same week by Reuters’ sources, which sug- “The Gorgon problems are less severe than
gested Chevron was in the market for LNG car- the market was expecting,” Australian consul-
goes during October-December. tancy Energy Quest’s director, Graeme Bethune,
Chevron does not comment on customer was quoted by Montel as saying. He added that
contracts, so none of these reports can be increased supplies from the US were likely to
confirmed. offset the losses related to the closures of Gor-
Term offtakers at Gorgon include Japan’s gon’s remaining trains.™

P10 www. NEWSBASE .com Week 34 28•August•2020