This story was originally published in The West Australian on 27 October 2017 with the headline "Hot air slows Gorgon trains." © Peter Milne.
Too much hot air around the LNG trains on Barrow Island has caused Chevron to flag a production cut at Gorgon as the US giant tackles problems onshore and offshore 19 months after the $US54 billion project’s maiden cargo.
WestBusiness understands Chevron told project participants last month expected production for the lifting year from April 2018 was 14.6 million tonnes, one million tonnes, or 13 per cent, less than nameplate capacity.
The difference is worth almost $500 million at the $9.10 a gigajoule price the Office of the Chief Economist forecast Australian LNG will average in 2018-2019.
In contrast, PNG LNG, operated by Gorgon participant ExxonMobil, started production in 2014 and operated at 14 per cent above nameplate capacity in 2016.
All LNG trains are more productive at lower temperatures, and Gorgon’s trains have air-cooled heat exchangers mounted on top for cooling.
Industry sources say the air is not circulating as predicted, causing some of the hot exhaust to be sucked into the heat exchangers of other trains, reducing their cooling effect.
The problem stems from the plant layout so is difficult to fix.
Baffles have been retrofitted on to some trains to improve the air flow.
It’s understood the Gorgon annual delivery program, a requirement in LNG contracts, is 13.3 million tonnes for the 12 months from April 2018.
It is less than the expected production to ensure commitments can be met.
Chevron upstream executive vice-president Jay Johnson told Wall Street three months ago all three trains had achieved or exceeded nameplate capacity and were operating smoothly.
A joint-venture partner was uncomfortable with LNG output achieved during the more productive cooler part of the year being equated to nameplate capacity — an annual average.
Industry sources have pointed to other problems not yet factored into production expectations.
Flow meters, of a type known as a V-cone, are cracking and fragments could damage equipment downstream of the meters. Fixing the problem may require further shutdowns.
Offshore, the gas from the Gorgon field has unexpected wax that may require the injection of chemicals.
Until the injection equipment is installed, the Jansz-Io field is supplying more than the planned 50 per cent of gas, which may bring forward the need for expensive planned extra wells and compression.
A spokeswoman said Chevron did not discuss day-to-day operations. Its next quarterly update is due late tonight.