Chevron Ships First LNG From Gorgon Project Off Australia
21 Mars 2016 - 3:42AM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Chevron Corp. has shipped its first cargo
of liquefied natural gas from its new multibillion dollar plant off
Australia's west coast to a customer in Japan, the U.S. energy
company said Monday.
The first export is a significant milestone for the Gorgon
project, which has been hit by delays and a jump in costs since
construction started, as it begins generating revenue for Chevron
and its partners.
"Asia Excellence," one of several new LNG carriers that Chevron
is adding to its fleet, departed the Gorgon gas facility on remote
Barrow Island off northwestern Australia, Chevron said. Its cargo
will be delivered to Chubu Electric Power, one of the foundation
buyers lined up for the project.
The US$54 billion project, a cornerstone in Chevron's efforts to
become a major LNG supplier, began production of LNG two weeks ago.
It is one of the world's biggest new LNG operations and represents
the single largest investment in Australia by a private company or
government. When completed, three production lines will produce
15.6 million metric tons of LNG a year plus enough gas to generate
electricity for 2.5 million Australian homes at full capacity.
The initial cargo was a key step in Chevron becoming a reliable
LNG provider to customers in the Asia-Pacific region from a project
expected to operate for decades to come, Mike Wirth, the company's
vice president for midstream operations and development, said.
Natural gas for Gorgon comes from two fields between 130 and 220
kilometers off the coast of Western Australia state. The gas is
cooled to a liquid, making it easier to store and ship, at the
plant on Barrow Island and then off loaded via a 2.1 kilometer long
jetty for shipment to international markets.
The price tag for Gorgon ballooned by about 45% since Chevron
and its partners made the decision to invest in 2009, due to
delays, higher labor costs and a jump in the value of the
Australian currency against the dollar. Chevron is operator and
majority owner of Gorgon, with Exxon Mobil Corp. and Royal Dutch
Shell PLC each holding 25% stakes. Osaka Gas, Tokyo Gas and Chubu
Electric each have minor interests.
Earlier this month, Chevron said worldwide demand for gas was
growing at twice the rate of oil and it continued to see
opportunities for LNG sales. As it stands, the company on Monday
reiterated that more than 80% its share of LNG from Gorgon and its
neighboring Wheatstone project, which is due to begin producing
mid-2017, is covered by longterm sales deals with customers in the
Asia-Pacific region. At the same time, as construction winds down
the company has forecast spending on Gorgon and Wheatstone will
decline from about US$8 billion this year to less than US$1 billion
in 2017.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
March 20, 2016 22:27 ET (02:27 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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