Leisure & Gaming Share Discussion Threads

[grupo] 21/9/2020 07:53

Monday, September 21, 2020

China expected to consume more natural gas in 2020: report
Source: Xinhua| 2020-09-20 23:21:30|Editor: huaxia

BEIJING, Sept. 20 (Xinhua) -- China's natural gas consumption is expected to increase in 2020 amid the country's efforts to step up exploration and development of the energy source, according to an industry report.

Consumption of natural gas is estimated to expand by 13 billion cubic meters to 320 billion in 2020, according to the report compiled by the National Energy Administration together with two other think tanks.

Both reserves and output growth hit a record high in 2019, with investment in oil and gas exploration reaching 335.5 billion yuan (about 49.6 billion U.S. dollars), up 25.7 percent year on year.

During the same period, natural gas imports rose 6.9 percent to 135.2 billion cubic meters with more diversified import sources, said the report.

Since 2019, China has been pushing forward market-oriented reform of the natural gas market, including opening up of the oil and gas exploration and development market in an orderly manner, promoting the building of a unified national network, and giving full play to the positive role of natural gas in air pollution prevention and control.

According to a three-year action plan on air pollution control released in 2018, China will boost the share of natural gas in its total primary energy consumption to 10 percent by 2020. Enditem

[waldron] 10/9/2020 18:49

Why Europe still can't take risks with its supply of Russian gas

By Hanna Ziady, CNN Business

Updated 12:25 PM ET, Thu September 10, 2020


London (CNN Business)The future of a nearly complete gas pipeline that promises to strengthen Russia's grip on Europe's energy supply has been thrown into doubt following the poisoning of opposition leader Alexey Navalny.
The German government has not ruled out consequences for the Nord Stream 2 pipeline as it moves to press the Kremlin for information about the poisoning, but analysts say that such a move would face multiple legal challenges and threaten Europe's cheapest supply of gas. Navalny is being treated in a Berlin hospital after being flown there from the Siberian city of Omsk.
Russia was the European Union's largest supplier of natural gas last year, accounting for 38% of imports, according to the European Commission. Restricting supply would raise prices for consumers across the European Union, experts say.
The European Union has been here before. The bloc pledged to cut its dependence on Russian gas after Moscow annexed part of Ukraine in 2014, but imports increased between 2016 and 2018 before falling slightly last year. Germany still imports more than half its natural gas from Russia, which is also the leading supplier of crude oil and coal to the European Union.

Who's standing up to Russia on Navalny poisoning? Not America
Who's standing up to Russia on Navalny poisoning? Not America
Russia has the largest natural gas reserves in the world and is the world's biggest gas exporter. The primary purpose of Nord Stream 2, which connects Russia to Germany via the Baltic Sea, is to reduce the reliance on transit routes through Ukraine, which have been increasingly difficult to negotiate due to the armed conflict in that country.
The new Baltic pipeline will have the capacity to meet about one third of the European Union's future gas import requirements, according to the Nord Stream 2 website. Russian state-controlled gas giant Gazprom is the project's sole shareholder.
While Europe has several other sources of gas supply, including liquified natural gas (LNG) from the United States, "Russia is a very big one and a very competitive one, which is why people buy it," said James Henderson, director of the natural gas research program at the Oxford Institute for Energy Studies.
Europe could decide to stop buying gas from Russia altogether, as Poland and Lithuania are trying to do, but prices would increase, Henderson added. Nord Stream 2 coming online next year as planned could reduce the cost of gas in Europe by about 25%, compared to a scenario where the project is abandoned, according to a Wood Mackenzie estimate.
"That would be good news for European gas consumers, obviously, but less welcome for companies seeking to export LNG from the US," said Wood Mackenzie's Americas vice chair, Ed Crooks.
Stacked pipes for Nord Stream 2 on the German island of Rügen, where ships are prepared for further construction of the pipeline.
Stacked pipes for Nord Stream 2 on the German island of Rügen, where ships are prepared for further construction of the pipeline.
Commercial interests at stake
The United States has already imposed sanctions on entities involved with Nord Stream 2, which it says is detrimental to the European Union's energy security.
It is concerned that the pipeline will bolster Russia's dominance in the European gas market, giving it undue influence in the region and squeezing out American LNG exporters.
Ukraine is also a key US ally and collects gas transit fees from Russia, leading to worries that the pipeline could destabilize the country and undermine the development of the gas market in Central and Eastern Europe.
A bipartisan bill introduced in the US Congress in June aims to expand sanctions on companies involved in the project, which is about 90% complete.
Germany, which has historically argued against the US position, could threaten sanctions on companies involved in Nord Stream 2 as a bargaining chip in the Navalny investigation, Henderson said, but doing so would have negative consequences for many European businesses.
America's liquefied natural gas boom may be on a collision course with climate change
America's liquefied natural gas boom may be on a collision course with climate change
Among them are two major German firms, the utility company Uniper and energy group Wintershall DEA, which have financed the pipeline. Other lenders include French utilities company Engie, Austrian industrial firm OMV (OMVJF) and Royal Dutch Shell (RDSA).
According to the German Eastern Business Association, European companies have already invested €5 billion ($5.9 billion) in the project and substantial damages claims could arise if there were any attempts to prevent it from being completed.
"Commercial interests may prove to be stronger than political interests on this particular front," said Carole Nakhle, CEO of London energy consultancy Crystol Energy.
It would also be politically difficult to sanction the pipeline, given that its backers have invested alongside Gazprom in an earlier pipeline project, Nord Stream, which is chaired by Germany's former chancellor Gerhard Schröder.
Russia would be hurt if Europe targets its energy trade. The European Union is its most important market and Gazprom has acted to retain market share by offering price discounts and more flexible contracts to many of its customers, Nakhle added.
"Gazprom's pipeline expansion plans, particularly Nord Stream 2, hinge upon such assumption of competitiveness as well as a strategic desire for more direct access to European core markets," she said. "However, other new pipelines into Europe, as well as the flexibility and competitive variable costs of LNG are likely to restrict the medium-term role of Russian gas."

Given the European Union's diversity of gas supply, energy security concerns are "overblown." But "it would be a dramatic move" to cancel the project," she said.
— John Defterios contributed reporting.

[sarkasm] 09/9/2020 10:23

offshire energy.biz

Total starts LNG-fueling station construction in the Netherlands

Infrastructure

September 9, 2020, by Adnan Bajic

Total Nederland and PitPoint.LNG kicked off the construction of a new multiple-energy truck station in Deventer.

Alongside the traditional fuels on offer, this multiple-energy station will at first be equipped with LNG, PitPoint said in its statement.

The multiple-energy truck station, planned to be operational December 2020, will be built on the grounds of the brand-new A1 business park in Deventer, which is within 500 meters of the A1 motorway, via exit 24. This is an advantageous location for road transportation in the Netherlands and cross-border transport heading to Germany, the statement reads.

The station will be open 24/7. There will be two LNG-pumps allowing trucks to fill up at the same time. The facility will feature extra cold LNG especially for Volvo trucks and a digital display with LNG filling instructions in 11 languages so that drivers from many different countries can follow the instructions.

This is also the first LNG refueling station at one of Total’s facilities in the Netherlands, the statement reads.

As part of Total’s new multiple-energy station where LNG, diesel and AdBlue will be offered, the design of the station is also leaving room for the potential of dispensing hydrogen in the future.

“This project fulfills our objective to grow in low carbon solutions. The transportation sector really needs to become cleaner. We see LNG as the right transition fuel for heavy road transport and it can be used now to start reducing CO2 emissions”, Marja Versleijen, director of mobility & new energies at Total Nederland.

Increasingly, Dutch transport companies are making the switch from diesel to LNG. With cleaner combustion and reduced CO2 emissions, LNG is the best alternative to diesel for heavy road transport at this point in time, PitPoint said.

In addition to the environmental benefits, transport companies geared to Germany also benefit from financial advantages: trucks driving on LNG in Germany are free of toll until December 31, 2023. The new LNG station by Total and PitPoint.LNG is also a response to this development.

[adrian j boris] 03/9/2020 10:52

Can Mini-LNG Plants Solve The Gas Flaring Problem?

By Irina Slav - Sep 01, 2020, 1:00 PM CDT


According to the World Bank, energy companies around the world flared 250 billion cubic meters of natural gas last year. That is the highest gas flaring rate since 2009, representing billions in lost profits from wasted gas. But there may be a clever solution to this problem: turn the gas into LNG and sell it abroad. LNG is a hot commodity despite a glut that has driven prices to historic lows, making some large-scale LNG projects economically unviable. Yet not all LNG facilities are large and cost billions to build. Nowadays, there are also mini-LNG plants that produce gallons instead of tons of the superchilled liquid gas. And, according to some, they can solve the flaring problem, at least in the Permian.

This is what the Houston Chronicle’s Jim Magill wrote in a recent article on flaring and LNG production. Small LNG plants churn out up to 100,000 gallons of LNG daily, which can then be transported to power plants and ports to fuel ships. It is already being done in some parts of the United States, but not the shale plays where the gad flaring actually occurs.

Globally, gas flaring costs oil producers some $17 billion in lost sales, according to UK-based flaring solutions providers Capterio. It also costs a lot in emissions, which is the reason flaring has been drawing increasing attention from regulators. Even the Texas Railroad Commission, which has been generous with flaring permits, recently approved changes to the regulatory framework around flaring that aims to reduce the amount of gas burned at oil fields.

In truth, flaring in the Permian fell sharply as oil production fell. New gas pipelines in the Permian have also helped the situation. But they have not solved the problem once and for all.

“Since the downturn, the rate of flaring has gone down with more than 99.5 percent of the gas produced in the month of May sold and beneficially used to generate electricity, cook dinner, or make hundreds of consumer products,” said the chairman of the Texas Railroad Commission in comments on the new rules. “Now is the opportune time to implement meaningful recommendations to reduce flaring before oil and gas production climbs back to previous highs.”


Production is already coming back on stream, and the flares will follow. Setting a mini-LNG train on-site could be the perfect solution, at least for those who have money to spare. Small-scale LNG trains may not cost billions to build, but they are not cheap either.

One southern Texas small-scale LNG plant, operated by Stabilis Energy, cost between $40 and $45 million to build, according to its CEO Jim Reddinger, who spoke to Chron’s Magill. The plant has a capacity of 100,000 gallons of LNG daily. It distributes its liquefied gas to various businesses across North America. But can the market support a dozen more LNG suppliers of this size?

This is the million-dollar question. The global LNG market is oversupplied, and this is already hurting U.S. LNG producers. Things are beginning to improve, with fewer U.S. cargos being canceled for delivery in September and October, but the situation on the LNG market is pretty similar to that on the oil market. There is way more supply than there is demand. In this context, which also features depressed investment appetite among energy companies, the chances are that few would be willing to consider solving their flaring problem by building small-scale LNG plants.

According to some in the industry, mini-LNG trains could help drillers save money. Chron’s Magill quotes the head of a former owner of a small-scale LNG plant, Kelley GTM Manufacturing, as saying LNG could be regasified and used to power drilling equipment in the field, replacing costlier diesel. The question here is, why liquefy and regasify when you have the gas as is at the field. Yet liquefied gas can also be used as fuel for machinery, and it could be a cheaper and cleaner alternative to diesel.

Be that as it may, the challenges for mini-LNG plants seem to be identical to those that large-scale plants have: securing long-term customers. In a low-price environment, many buyers prefer to tap the spot market than to commit to long-term contracts that are the bread and butter of LNG producers. For all the benefits that small-scale LNG plants can deliver in the gas flaring department, finding enough consumers for the fuel remains the major challenge. This is because demand for LNG as fuel for oil production equipment depends on oil demand.

Mini-LNG plants at the oil field only make sense if there are enough rigs and hydraulic pumps to be fuelled with gas. An alternative use is as fuel for ships—demand for LNG-powered smaller vessels is on the rise. But given the amounts of LNG that are used as fuel, small-scale producers would have to face the stiff competition of larger LNG companies.

Replacing flaring with LNG production certainly sounds like a good idea. It could be a particularly good idea for bigger flarers than the United States, such as Iraq. But whether it is a good idea for the Permian right now remains to be seen.

By Irina Slav for Oilprice.com

[the grumpy old men] 02/9/2020 10:41

Coal | Electric Power | Natural Gas 02 Sep 2020 | 07:55 UTC Singapore

S Korea's 9 nuclear plants restarting Sep-Oct to pressure LNG demand

Author Charles Lee and Eric Yep Editor Norazlina Jumaat Commodity Coal , Electric Power, Natural Gas

Highlights

8 existing, 1 newly built nuclear plants return from maintenance

Total 8.7 GW, or 37.2% of overall nuclear capacity

Q4 gas demand in power 60 mcm/d versus 74 mcm/d Q4 2019: Platts Analytics

Singapore — South Korea is on track to restart operations at eight nuclear power plants, that were shut for maintenance, and start a newly built plant over the next two months, in a move that will dampen demand for gas-fired power generation and put pressure on LNG imports.

The nuclear restarts come very close to North Asia's procurement period for winter LNG, amid high inventories at South Korea's gas storage facilities, and when LNG demand for power production has suffered from the economic slowdown and the coronavirus pandemic this year.

Some of these nine reactors are restarting from an extended maintenance of two to three years, while others were idled for only a few months. They have a combined capacity of 8,650 MW and account for 37.2% of South Korea's overall combined capacity of 23,250 MW from 24 plants.

Nuclear power accounts for about 30% of South Korea's electricity mix, LNG-fired power plants are responsible for around 25%, and coal-fired power plants satisfy around 40% of demand. The remaining come from sources like renewables and hydro.

"This large increase in generation from nuclear units will lower the need for thermal fuels," Andre Lambine, senior analyst for gas and power at S&P Global Platts Analytics, said. Platts Analytics assumes gas-fired generation will decline, Lambine added, and believes demand for gas in power could average below 60 million cu m/d for Q4, which is a drop from the 74 million cu m/d a year ago.

"As the set of nuclear reactors will be connected to the grid over the next two months, the country's demand for LNG for electricity generation is expected to decline later this year," an official at the Ministry of Trade, Industry and Energy said.

NUCLEAR RESTARTS

A newly constructed reactor -- the Shin Hanul-1 -- one of South Korea's biggest nuclear power plants with a capacity of 1,400 MW, has been under construction since April 2010 and is scheduled to start commercial operations in October, according to state-owned nuclear power operator Korea Hydro & Nuclear Power.

KHNP also plans to restart the 950 MW Hanul-1 and the 1,000 MW Hanul-6, both on the east coast, in October, after a three-month maintenance. It will also restart three reactors at the Hanbit nuclear complex on the west coast -- Hanbit-3, Hanbit-4 and Hanbit–5, each with a 1,000 MW capacity -- by Oct. 17. The 950-MW Hanbit-2 restarted on Aug. 28 having been under maintenance since June 3.

Hanbit-4 has been shut for more than three years since May 2017 due to voids in concrete containment walls and corrosion on containment liner plates. The Hanbit-3 has been shut since May 2018 also due to similar issues.

In addition, the Wolsong-4 reactor with 700 MW capacity on the east coast is scheduled to restart in October after a three-month maintenance. The 650 MW Kori-2 reactor on the southeast coast, which has been shut for maintenance since Feb. 27, will restart on Sept. 3.

However, the impact of these restarts through September and October will be offset by the shutting of three other reactors for maintenance by December.

These include the 1,400 MW Shin Kori-4 that will close for maintenance from Oct. 19 to Jan. 8, 2021, while the 700 MW Wolsong-2 will shut on Sept. 15 for maintenance until Dec. 8. The 950 MW Hanbit-1 will undergo maintenance from Dec. 9 to Feb. 21, 2021, according to KHNP.

BEYOND 2020

Another big reactor -- the Shin Hanul-2 with a capacity of 1,400 MW -- is scheduled to start commercial operation in Aug. 2021, a significant addition to South Korea's nuclear capacity.

Future nuclear capacity additions include the Shin Kori-5 and Shin Kori-6, each with a capacity of 1,400 MW, which have been under construction since June 2016 and expected to start up in March 2023 and June 2024, respectively.

LNG sales by state-owned Korea Gas Corp., which has a monopoly in domestic natural gas sales, fell 9.1% year on year to 17.945 million mt in the first half of this year.

Of the total, LNG sales to power generators dropped 16.5% year on year to 7.267 million mt over January-June, while LNG sales to retail gas companies for households and businesses also fell 3.2% year on year to 10.678 million mt in the first-half.

In 2019, Kogas sold 33.597 million mt, down 7.2% from 36.219 million mt in 2018.

TABLE: South Korea's nuclear power capacity changes

Starting up in Q3/Q4 2020

Name
Capacity (MW)
Maintenance period
Shin Hanul-1
1,400
Starts operations in Oct
Hanul-1
950
Jul 23-Oct 13, 2020
Hanul-6
1,000
Jul 24-Oct 25, 2020
Hanbit-2
950
Jun 3-Aug 28, 2020
Hanbit-3
1,000
May 11, 2018-Oct 17, 2020
Hanbit-4
1,000
May 18, 2017-Sep 30, 2020
Hanbit-5
1,000
Apr 10-Sep 23, 2020
Wolsong-4
700
Jul 22-Oct 11, 2020
Kori-2
650
Feb 17-Sep 3, 2020

Going Offline in Q4

Name
Capacity (MW)
Maintenance period
Shin Kori-4
1,400
Oct 19, 2020 - Jan 8, 2021
Wolsong-2
700
Sep 15 - Dec 8, 2020
Hanbit-1
950
Dec 9, 2020 - Feb 21, 2021

New capacity additions in future

Name
Capacity (MW)
Start up date
Shin Hanul-2
1,400
Aug-2021
Shin Kori-5
1,400
Mar-2023
Shin Kori–6
1,400
Jun-2024

[grupo] 23/8/2020 08:50

Alaska LNG project secures final approval from US DOE for exports

Oil & GasMidstreamPipeline

By NS Energy Staff Writer 21 Aug 2020

The approval allows the project to export LNG to to any country with which the US has not entered into a free trade agreement
pipe-4013040_640

The LNG project is expected to complete all federal reviews and authorizations by the end of the year. (Credit: SatyaPrem from Pixabay)

Alaska Gasline Development Corporation’s (AGDC) $38.7bn Alaska LNG Pipeline Project has secured final authorisation for gas exports.

The approval from the US Department of Energy (DOE) allows the project to export LNG to all countries, including those without US free trade agreements (FTA).

The announcement follows the US Department of the Interior (DOI) issuance of rights-of-way permits for the project last month.

The Alaska LNG is an integrated project, which involves construction of about 1,400km of pipelines.

It also includes construction of a 20 million tonnes per annum (MTPA) liquefaction facility at Nikiski, Kenai Peninsula, Alaska, US and a gas treatment plant in the Prudhoe Bay.

The natural gas produced at the Prudhoe Bay and Point Thomson oil and gas fields on the Alaska’s North Slope will be supplied to the project.

The natural gas treatment facility of the project will have three process trains with a total average capacity of 3.5bcf a day.
All federal reviews and authorizations for Alaska LNG to be completed by end of 2020

DOE Deputy Secretary Mark Menezes said: “I am proud to sign this export authorization that allows a path for the otherwise stranded gas resources on the North Slope of Alaska to be made available both to the people of Alaska and to the export market.

“Major infrastructure investments like the Alaska LNG Project will bring long-term benefits to Alaskans, the United States, and to importing nations.”

Furthermore, the project is expected to complete all federal reviews and authorizations by the end of the year.

In June, AGDC reduced the cost estimate for the Alaska LNG project by 12% of $5.5bn from the previous estimate of $44.2bn.

[grupo guitarlumber] 21/8/2020 09:57

BHP sees plenty of LNG supply till mid-2020s

August 21, 2020 Company News, Government, Infrastructure, Natural Gas, News, World 0

Australia’s resources company BHP expects ample global liquefied natural gas (LNG) supply until mid-2020s, with considerable overflow from Asia to Europe at times.

“Despite the strong LNG demand growth that we project, current and committed capacity is likely to amply supply the market until the middle of this decade,” BHP said this week.

The mining group said in its “generally constructive” outlook that new liquefaction projects will be required beyond the mid-2020s, Kallanish Energy reports.

A large amount of additional capacity has entered the market recently, with the overflow from incomplete ramp-ups influencing fundamentals in 2020. The global LNG market was already facing a supply glut even before the “Great lockdown” and prices collapsed on the double whammy.

Yet, the actual production of these new and upcoming facilities will be lower than their nameplate capacity. BHP sees these slower ramp-ups as “a sensible response to the deeply oversupplied market.”

In the Jan-June period, the Japan-Korea Marker (JMC) benchmark for Asian LNG prices averaged $2.89 per million British thermal units (MmBtu) DES Japan. This is 45% lower than the prior six months, with the price ranging from $1.83 to $5.35/MmBtu.

The outlook for price and demand growth are highly tied to “key uncertainties” such as the Chinese energy mix policies and the scale of competing supply of indigenous and pipeline gas; investments level in Indian new gas infrastructure; timing and scale of nuclear restarts in Japan; and energy mix policies in South Korea.

BHP also expects the amount of Russian pipeline gas supplied to Europe to represent a “swing factor” in the outlook.

“In the longer term, we see LNG as a commodity that has an opportunity to operate under inducement economics, at times, given the combination of systematic base decline and an attractive demand trajectory,” the group said.

It added that the global gas market “is big and getting bigger” – and the LNG share of the market could almost double to around one-fifth by 2050.

But BHP said only assets that are advantaged by proximity to existing infrastructure, or customers, or both, are attractive to the company.

[gibbs1] 08/8/2020 09:04

Hot weather sends natural gas prices surging

WTI remains above $41 as it stays in narrow price band

By Mella McEwen, MRT.com/Midland Reporter-Telegram Published 5:55 pm CDT, Friday, August 7, 2020

West Texas Intermediate eked out a small gain this week, remaining above $41 a barrel as it continues to be stuck in a narrow trading band.

West Texas Intermediate eked out a small gain this week, remaining above $41 a barrel as it continues to be stuck in a narrow trading band.

Natural gas prices, however, saw strong gains this week, starting with a 30-cent jump Monday that put it over $2.10 per Mcf on the New York Mercantile Exchange. That was followed by a 9-cent gain Tuesday, then prices slumped lightly Wednesday and Thursday before gaining 7 cents Friday to close at $2.24 per Mcf. That’s well above the $1.80 Mcf at last Friday’s close.

“NYMEX Henry Hub posted substantial gains on August 3 and 4 due to an easing of storage availability fears, excessive heat in June and July and more of the same expected in August and signs of strengthening LNG export demand,” Midlander Mike Banschbach, an oil gas, and natural gas liquids marketing consultant, told the Reporter-Telegram by email. “However, prices in the Permian were tempered by the rising basis between Waha and Henry Hub, resulting in a modest 15 cent per MMBtu gain in Waha prices for the fourth quarter.”

Banschbach said that if crude prices creep up above $45 a barrel later in the year, prompting Permian producers to drill and complete wells, that will result in more natural gas – associated with the crude production – being put in the market and that will put downward pressure on the Permian natural gas price.

WTI on the NYMEX reported three days of gains this week, putting it above $42 a barrel Wednesday before prices slumped the final two days of the week. WTI fell 73 cents to close at $41.22 per barrel Friday, up from $41.04 at Monday’s close. The posted price ended the week at $37.75 a barrel.

Bloomberg reported that crude prices were weakened by renewed tensions between the U.S. and China, which the news service said rattled markets already reeling from uncertainty over a new round of economic stimulus to help the economy through the COVID-19 pandemic.

According to Bloomberg, crude is testing the upper bound of its recent trading range after hitting a five-month high this week amid shrinking U.S. stockpiles. But taking the wind out of any sustained breakout rally is the spotty recovery in oil consumption, with crude imports into China shrinking in July.

Roger Diwan, vice president, financial services at IHS Markit, said in a market assessment that prices are emerging “bruised and battered from the worst of the COVID-19 outbreak” and are now at a delicate point as prices transition to what his company calls Phase II of its three phased of market recovery.

The second phase is the “just-in-time” phase in which surplus inventories are being worked down in parallel with rising supplies as spare supply capacity returns from the OPEC+ alliance and North American producers.

“The record cuts set in motion in May and June by Saudi Arabia and its OPEC+ partners played a pivotal role in accelerating the improbable rebalancing of global oil markets. With demand recovering from April lows and after giving markets an extra month to find their footing, these exporters have now moved from managing the immediate surplus of the crisis towards managing the recovery,” Diwan wrote in his assessment.

“The recent display of restored harmony among OPEC+ heavyweights Saudi Arabia and Russia illustrates that the strategic debate within the group over price levels and market share has time to run,” he wrote. “As long as prices hold in the current range, demand concerns will likely help keep the agreement on course. When prices surpass $50 a barrel, potentially lifting capital spending in the United States higher, that is when changes to the tenor of the discussion, and the divergence of interest could start to play out.”

[grupo guitarlumber] 07/8/2020 13:45

Chevron may need to close Gorgon LNG over safety concerns
Aug. 7, 2020 7:32 AM ET|About: Chevron Corporation (CVX)|By: Carl Surran, SA News Editor

Western Australia's government has ordered an urgent inspection of critical equipment on two of the three trains of Chevron's (NYSE:CVX) Gorgon liquefied natural gas plant following safety concerns raised by a trade union.

The order raises the possibility that the plant may need to be closed to carry out the inspections of the propane heat exchangers on the two trains by an Aug. 21 deadline to see if the same cracks that are requiring repairs to Train 2 are also present there.

Gorgon LNG is one of the world's largest liquefied natural gas plants, with the capacity to produce 15.6M mt/year of LNG; it is 47.3% owned and operated by Chevron, while Royal Dutch Shell (RDS.A, RDS.B) owns 25% and Japanese firms hold smaller stakes.

Train 2 has been shut since May for planned maintenance, which was extended after a routine inspection of the train's propane heat exchangers found weld quality problems.