Page 11 - AsianOil Week 31

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Chevron sets Gorgon Train 2 restart date

PROJECTS & SUPER-MAJOR Chevron said this week that The train was initially due to restart on July
COMPANIES it anticipates restarting the second liquefaction 11, and the previously scheduled work is now
train at Western Australia’s Gorgon LNG termi- mechanically complete, according to a Chevron
nal in early September after completing repairs spokesman cited by Reuters. The eventual restart
that are currently underway. will depend on the findings of the Australian
This comes after a routine inspection of the Department of Mines, Industry Regulation and
train’s propane heat exchangers during planned Safety’s (DMIRS) inspectors.
maintenance that began on May 23 found weld The spokesman told Reuters that Trains 1
quality issues. Media have reported various and 3 were in service and that Chevron was still
sources as claiming that cracks – potentially delivering the LNG it is contractually commit-
numbering in the thousands – were discovered ted to sell, as well as domestic natural gas. The
in the equipment. According to the Australian extended shutdown may actually be welcomed
Financial Review, Chevron has sought to assuage by the market, as it is expected to boost spot LNG
Australian Manufacturing Workers Union fears prices in Asia, which remain at seasonal lows but
that the cracks may not be reparable, insisting rose to a nearly four-month high in recent days.
that it can fix them without needing to replace Chevron describes the $54bn Gorgon project
the heat exchangers. Train 2 has eight propane as the largest single-resource development in Aus-
heat exchangers altogether. tralia’s history. Production from the project began
The union has responded to claims that some in 2016 and averaged 2.3bn cubic feet (65mn cubic
of the cracks are up to 39mm – saying that if they metres) of gas and 6,000 barrels of condensate
are that deep, they cannot be repaired and the in 2019. The liquefaction plant has a capacity of
heat exchangers, which were manufactured in 15.6mn tonnes per year (tpy), and a carbon capture
South Korea, would need to be replaced alto- and storage (CCS) facility – one of the largest in the
gether. The claims have prompted state and world – also started up at Gorgon in 2019, albeit
federal officials to plan their own inspections of more than two years behind schedule.
Gorgon Train 2. Chevron, for its part, has said Chevron holds a controlling 47.3% interest in
it is working closely with regulators to carry out Gorgon. ExxonMobil and Royal Dutch Shell each
the repairs and has appropriate safety measures own 25% stakes in the project, and Japan’s Osaka Gas,
in place. Tokyo Gas and JERA own the remaining share.™

Origin’s APLNG revenue dips 5% in FY20

PERFORMANCE ORIGIN Energy has revealed that its share (JCC) indexed contracts and spot prices had
of revenue from the Australia Pacific LNG materially declined in the April-June quarter
(APLNG) project declined 5% in financial year owing to weaker demand linked to the coro-
2019-2020 owing to the coronavirus (COVID- navirus (COVID-19) pandemic and also the
19) pandemic’s impact on global energy demand. disagreement among OPEC+ members over
The company said its share amounted to production cuts in early March. As a result, APL-
$2.64bn and had fallen despite an uptick in pro- NG’s realised lagged oil price fell to $68 per barrel
duction, which had been offset by lower pur- in 2019-2020 from $73 per barrel in 2018-2019.
chases and gas inventory movements. The company noted that domestic gas revenue
APLNG’s total natural gas production, for had shrunk by 12% owing to smaller sales volumes
both the export market and domestic buyers, and lower average prices. The company’s average
climbed by 4% year on year to 707.6 PJ (18.43bn domestic spot gas price for the final quarter of the
cubic metres) from 679.1 PJ (17.69 bcm) a year financial year amounted to $4.39 per GJ ($168.52
earlier. Origin said LNG production had climbed per 1,000 cubic metres), compared with $9.53 per
by 1% to 8.71mn tonnes, while sales remained GJ ($365.83 per 1,000 cubic metres) in the same
flat at 8.69mn tonnes. three months of the previous year.
Origin cited improved operated and non-op- Origin CEO Frank Calabria said: “The pan-
erated field performance with higher well avail- demic has impacted natural gas and electric-
ability and facility reliability as being behind the ity demand and some residential and small to
uptick in output, but noted that operated gas medium enterprise [SME] customers are facing
production fell in the April-June quarter owing financial difficulties. Our focus has been on sup-
to lower demand. porting customers, and we have extended our
Revenue from LNG sales dipped 4% y/y to commitments not to disconnect those in finan-
$6.19bn on the back of higher sales into a weaker cial distress and to waive late payment fees until
spot market. Origin said Japan Crude Cocktail October 31.”™

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