Gorgon on track after teething problems: Chevron
The head of Chevron says the massive Gorgon liquefied natural gas plant is shaking off its early teething problems.
The head of global energy giant Chevron says the company’s massive Gorgon liquefied natural gas plant is shaking off its early teething problems, with the $55 billion project’s first train closing in on its targeted capacity.
Speaking during the first Chevron board visit to Australia in six years, Chevron chief executive John Watson said Gorgon’s train one was starting to hit its straps.
The Chevron board has visited both Gorgon on Barrow Island and Chevron’s $US29bn Wheatstone LNG project near Onslow on Western Australia’s northwest coast this week for a first-hand look at the two mega projects.
“I can tell you we were so impressed with what we saw at Gorgon and Wheatstone these last few days,” Mr Watson said.
“Train one (at Gorgon) is now over 85 per cent of capacity and train two will be starting up next month, they tell me. Construction is going well and the start of commissioning is going well.”
Gorgon’s train one produced its first LNG in March, but the facility was shut down soon after due to technical issues.
It has been steadily ramping up since, with Chevron’s most recent guidance in July putting the first train’s capacity at 70 per cent.
Chevron has been attacked in the past over what some critics have argued is a lack of local Australian participation in the construction of both Gorgon and Wheatstone, which have relied heavily on the use of modules imported from overseas.
Mr Watson said local participation was important to Chevron.
“In Australia and frankly the industrial world, populism is at a high level and a fever pitch,” he said.
What I would like to do is tell the Australians ... that these projects do draw from resources and technology and competencies around the world, but these two projects have spent $45bn on Australian content.
“We have taken great care with our partners to make sure we utilise Australian business and Australian labour and capabilities.
“We will continue to make that a priority.”
While the plunge in the price of oil and a surge in global LNG supply out of Australia has weakened LNG prices and clouded the industry’s outlook, Mr Watson said he believed in a bright future for the commodity.
He said LNG would be the key fuel for the likes of Japan, South Korea, China and other Asian nations for the “foreseeable future”.
“It is essential to their economies, it is essential to their economic growth, and of course it has desirable environmental characteristics as well,” he said.
“From my admittedly biased point of view, I see enormous benefits for Australia.”
Mr Watson was accompanied in his visit to Australia by most of the Chevron board, including the chief executive of 3M Inga Thulin.
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