Chevron's (CVX) Gorgon LNG Train 3 Hit By Mechanical Snag
Zacks Investment Research | Jan 16, 2019 09:07PM ET
Chevron Corporation (NYSE:CVX) has decided to temporarily suspend production at the Gorgon LNG project’s Train 3 in order to address a mechanical issue. With Australia sweltering under an extreme heatwave, the LNG plant's cooling processes have likely been affected by mechanical issue due to record-breaking temperatures.
Gorgon LNG is not only the most expensive project of Chevron but also the largest single resource project in Australia, dealing with the delivery of natural gas to international and domestic customers. Many industry watchers believe that the temporary suspension of the Gorgon Train 3 is likely to give a boost to the Asian LNG prices, which hit its lowest in eight months during the last week. Markedly, the winter prices are at two-year lows amid weaker demand owing to warmer weather in Japan and China.
Notably, the $69-billion project has been facing several hindrances in production since it dispatched its first cargo in March 2016. Since then, more than 250 cargoes have been dispatched to Asia. The Gorgon LNG project has a shipment capacity of 15.6 million metric tons per year.
While Chevron, holding 47.3% stake, is the chief operator of the Gorgon LNG project, Exxon Mobil Corporation (NYSE:XOM) and Royal Dutch Shell (LON:RDSa) PLC Zacks Investment Research
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