Chevron and its partners in the Gorgon LNG facility offshore Australia have approved a $2-billion expansion project that would involve drilling six new wells and connecting new reserves to existing infrastructure.
Chevron said in a statement today that the expansion will involve connecting two gas fields to the existing subsea infrastructure that gathers gas and sends it to the liquefaction plant. The company’s head of Australian operations said the expansion project would help maintain long-term production at Gorgon, ensuring supply for the domestic Australian market and for export markets.
“Gorgon Stage 3 is a cost-competitive development which will optimise existing infrastructure and complement the well-progressed Jansz-Io Compression Project and previously completed Gorgon Stage 2 infill development,” Chevron’s Australian chief, Balaji Krishnamurthy, said.
Gorgon LNG has a capacity of 15.6 million tons of liquefied gas as well as 300 terajoules of gas for the Australian market, more specifically the market in Western Australia. Chevron’s partners in the venture are Exxon and Shell, each with a 25% stake, plus Osaka Gas, JERA, and MidOcean, with stakes of around or less than 1%. Chevron holds a 47% interest in the project.
Chevron operates two massive LNG projects in Australia: Gorgon, which its 15.6 million tons in capacity is the larger one—and the largest in Australia as a whole. The other, Wheatstone, can produce 8.9 million tons of liquefied natural gas annually. The two together account for about 5% of global LNG supply.
LNG is a big part of Chevron’s growth strategy, as it is across the Big Oil industry. The supermajor recently signed a 20-year LNG supply deal with Energy Transfer, at a rate of 2 million tons annually. The company is also in contractual relations with Venture Global, the controversial LNG producers that is being sued by half a dozen energy majors for contract breaches.
By Irina Slav for Oilprice.com
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