The Gorgon joint venture—Chevron Corp., ExxonMobil Corp., and Royal Dutch Shell PLC—has decided on a 50% increase in the scope of the proposed LNG project facilities on Barrow Island off Western Australia from two 5-million-tonne/year trains to three trains of 5 million tonnes/year capacity.
A Chevron Australia spokesman says that developing three LNG trains in rapid succession will improve the project economics and address mounting industry cost pressures.
However the addition of a third train will need an additional approval from the government and the environmental authorities.
Chevron says that it expects very little change to the environmental impact on Barrow, as the three trains will all be built within the already approved 300 hectare development site which represents 1.3% of the island’s total area.
A formal environmental assessment for the third train is to be referred to the Western Australian Environment Protection Authority in the next few months.
The expansion had been mentioned unofficially several times last year and the recent official decision has been driven by the rising cost pressures facing all projects in the north of Western Australia. However it is likely to attract renewed scrutiny and debate.
The Gorgon Project has an estimated resource base exceeding 40 tcf of gas in fields located 200 km offshore in up to 1,300 m of water.
Chevron says that during the next 12 months it will be working with government to secure approvals for the third train and will commence the front-end engineering and design. It also will be considering an expansion of the project team and the possibility of early initial work on Barrow.
There is no word yet about whether the JV will need to increase the number of subsea wells, the carrying capacity of the two pipelines in the initial design, or to build a third pipeline or tap additional fields in the Gorgon area.
In related news, Chevron has placed an order with Atwood Oceanics Inc. for a new $590 million semisubmersible rig to work exclusively in the company’s offshore northwest Australia permits for 3 years with an option for 6 years.
The rig, to be built in the Jurong shipyard in Singapore, is expected to be delivered in early 2011.
It will be able to conventionally moor with its own equipment in water as deep as 6,000 ft and to moor at 8,000 ft with prelaid moorings.
Since 2005 Chevron has been awarded seven new deepwater permits off Western Australia and has made three significant gas discoveries: Wheatstone, Chandon, and Clio.
