Chevron has suffered a further slippage in the start-up of its $US34 billion ($42 billion) Wheatstone LNG project in Western Australia, but has told investors that production should commence in August.
The first production unit at the two-train project, which had been targeted for start-up in mid-2017 after missing an original end-2016 date, is "in the final stages of commissioning", head of upstream Jay Johnson said in the US.
Investors have been nervously awaiting the start of production at Wheatstone after the circa 18-month delay at Chevron's first WA LNG venture, the monster Gorgon project, which ran $US17 billion over the original budget.
The Wheatstone schedule is more relevant for Australian investors given the participation of Woodside Petroleum, with a 13 per cent stake. This project has seen a more modest cost increase, of $US5 billion.
Woodside chief executive Peter Coleman said earlier this month he was "very pleased with the contribution that Woodside has been able to make" at Wheatstone, which it bought into through a December 2014 deal with Apache.
Mr Johnson said the Wheatstone offshore platform and pipeline to shore were up and running and described the initial performance of the wells as "encouraging".
The start-up process is under way and "LNG production is expected to follow next month," he said in a June quarter briefing.
Second Wheatstone train on track
The second train at the 8.9 million tonnes a year Wheatstone project was "on track" to start up six to eight months after the first, he said. Construction will wind down in the December quarter before plant commissioning gets under way.
"At this point in time, [we] really don't see any particular on obstacles or challenges in our path to getting Train 2 complete and getting into the commissioning and start-up," Mr Johnson said, foreshadowing some improvements in efficiency just as happened at Gorgon as its three production trains each started up in turn.
At Gorgon, Mr Johnson said performance had been "strong" despite several technical hitches since the first cargo was shipped in March 2016.
The start-up of the third train, in March this year, was "a beautiful thing", which "looked great," Mr Johnson enthused.
All three units were "stable at or above nameplate," he said, with Chevron now focusing on opportunities to increase reliability.
"It's how many trips or how many times does the plant go offline, and obviously we want to eliminate those so that the plants run reliably day in and day out," he said.
Mr Johnson said the Gorgon trains could see short interruptions to make adjustments to improve efficiency.
The 15.6 million tonnes a year venture produced 333,000 barrels of oil equivalent per day on average in the June quarter and is currently averaging around 430,000 bbl/d. Some 88 LNG cargoes have been shipped this year.
"There may be times we'll take short pit stops but those would be planned in advance and they'll be driven by economics," Mr Johnson said, adding he expected "de-bottlenecking" opportunities that could increase capacity.
The Wheatstone start-up will leave just Shell's Prelude floating LNG project and Inpex Corporation's Ichthys project in Darwin as the last two of Australia's $200 billion-plus wave of new LNG projects still to come online. Both are due to start next year, taking Australia closer to becoming the world's biggest LNG producer.
Australia broke the 50 million tonnes barrier for annual exports of LNG for the first time in 2016-17, exporting some 51.4 million tonnes, a 37 per cent jump from 2015-16, according to EnergyQuest. The consultancy says exports should grow a further 22 per cent this year to 63 million tonnes.
