Gas Leak Forces Shutdown At Chevron Gorgon LNG

Published at 05:14PM - 01/07/16

Chevron has reportedly experienced a gas leak at its Gorgon liquefied natural gas (LNG) project on Barrow Island, off Western Australia.

So far, the incident has led to the evacuation of workers and a temporary production shutdown, although shipments should be resumed in the coming days.

The US major has reportedly evacuated its workers – between 2,000 and 4,000 – following the “minor gas leak”, without any injuries reported.

Gas Leak Forces Shutdown At Chevron Gorgon LNG

According to media sources, Chevron is already on track to make a second shipping in the following days, after undertaking some minor repair work.

Meanwhile, traders are saying that the event has already caused Asian prices for LNG to rise to their highest since the beginning of the year, together with higher prices in the UK and an increase in Asian demand.

Chevron Gorgon LNG Project Map
Chevron Gorgon LNG Project Map

The Gorgon LNG project is located within the Greater Gorgon area, 80 to 136 miles off the northwest coast of Western Australia.

It is operated by Chevron and is a joint venture (JV) between the Australian subsidiaries of Chevron (47.3%), ExxonMobil (25%), Shell, Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).

A Troubled US$54bn LNG Project

Chevron started producing LNG and condensate from the project in the beginning of March and the first shipment was sent in late March. However, the project had to be shut down in April due to technical issues.

This was just another setback, as the project is considered as Australia’s largest resource development and has faced a string of delays, cost overruns and labour unrest during its construction.

When completed, Gorgon LNG started exporting to customers in Asia, around the same time the world saw the worst energy crash in decades.

Once all three production trains are operating, the US$54 billion (£40.61 billion) project will have a production capacity of 15.6 million tonnes of LNG per year.