Australia’s largest LNG project Gorgon commences production

Thursday, March 10, 2016

Chevron has announced that the Gorgon project has commenced production and its first shipment is imminent from its 3-train 15.6m tn pa LNG plant.

Gorgon has become Australia’s largest ever investment project with costs estimated to be in the vicinity of US$54b This will be a long term project, with production from Gorgon set to extend beyond 2040.

This new LNG production comes after the recent start-up the three Gladstone LNG plants being Origin’s led APLNG 2-train 9.0m tn pa (~US$18b), the Santos led GLNG 2-train project of 7.8 m tn pa (~US$18.5b) and Shell’s led QCLNG 2-train project of 8.5m tn pa (~US$20b). These Gladstone projects also project revenue streams into the decades ahead.

Australia’s rapid ramp up of LNG production has been mapped by the RBA, see below, who predicted in its March 2015 report that Australia’s build-up in LNG capacity would see Australia as the world’s largest LNG producer in 2018.

LNG pricing has also suffered from the global decline in energy prices as well as the effects of oversupply. Globally, production of LNG continues to expand with Australia’s increased supply augmented by new supply including gas export from the USA. The FT has charted the global ramp up to reach circa 340m tn pa by 2018.

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