Chevron, alongside its partners, has officially green-lit a significant $2 billion expansion at the Gorgon LNG facility located offshore Australia. This major development, announced on March 15, 2024, includes the drilling of six new wells and the connection of new gas reserves to the existing infrastructure. The expansion aims to enhance long-term production capabilities at Gorgon and secure a steady supply for both the domestic Australian market and international export.
Details of the Expansion Project
In a statement, Chevron highlighted that the project will connect two additional gas fields to the current subsea infrastructure, which is responsible for collecting gas and transporting it to the liquefaction plant. Balaji Krishnamurthy, Chevron’s Australian chief, emphasized that the Gorgon Stage 3 project represents a cost-effective development strategy. He noted that it will optimize the existing infrastructure while complementing the well-advanced Jansz-Io Compression Project and the previously completed Gorgon Stage 2 infill development.
The Gorgon LNG facility currently boasts a capacity of 15.6 million tons of liquefied natural gas (LNG) and supplies 300 terajoules of gas specifically to the Australian market, with a focus on Western Australia.
Partnership and Overall Impact
Chevron’s partners in this venture include Exxon and Shell, each holding a 25% stake, along with Osaka Gas, JERA, and MidOcean, which each have smaller stakes. Chevron maintains a 47% interest in the Gorgon project. This facility is notable for being the largest LNG project in Australia and is complemented by Chevron’s other major LNG project, Wheatstone, which has an annual production capacity of 8.9 million tons.
Together, these two projects account for approximately 5% of the global LNG supply, underscoring Chevron’s significant role in the energy market. LNG is a critical component of Chevron’s growth strategy, reflecting broader trends within the oil and gas industry.
Recently, Chevron also secured a 20-year LNG supply deal with Energy Transfer, committing to deliver 2 million tons of LNG annually. Additionally, the company has ongoing contractual relationships with Venture Global, a controversial LNG producer currently facing legal challenges from several energy firms over alleged contract violations.
This expansion at Gorgon LNG is set to reinforce Chevron’s position as a key player in the global energy landscape, ensuring that both Australian and international markets benefit from a reliable supply of natural gas.
