Chevron's Gorgon LNG Resumes Full Production After Month-Long Outage

Chevron has successfully restored full production at its Gorgon liquefied natural gas (LNG) export terminal in Western Australia following a month-long outage. The mechanical fault in a turbine, which caused the disruption, has been resolved, allowing the affected production train to resume operations. Despite the outage, the remaining two production trains and the domestic gas plant continued to operate at full capacity, ensuring ongoing supply and mitigating broader market impacts.

The outage at Gorgon LNG, one of the world's largest LNG projects, had a notable effect on global LNG prices. Spot LNG prices rose to approximately $12 per million British thermal units (MMBtu) during the downtime, as reported by S&P Global Platts. The price hike underscored the facility's critical role in the global LNG supply chain, particularly in the Asia-Pacific market, where demand remains robust.

Gorgon LNG is operated by Chevron, which holds a 47% stake in the joint venture, with Exxon Mobil and Shell each holding 25%. The project includes three LNG trains with a combined production capacity of 15.6 million metric tons per year. 

This incident at Gorgon follows a series of technical and labor challenges at Chevron's Australian LNG facilities. Last year, an electrical issue caused reduced capacity at one of Gorgon's LNG trains, and a separate fault at the Wheatstone LNG plant coincided with industrial strikes. The resolution of these issues and the recent agreement with labor unions have stabilized operations, reinforcing Chevron's position in the global LNG market.

The full restoration of Gorgon LNG production not only stabilizes supply but also alleviates market concerns about prolonged disruptions. As global LNG demand continues to grow, particularly in Asia, the reliability of key suppliers like Chevron remains crucial for market stability and energy security.

By Julianne Geiger for Oilprice.com

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