Chevron weighs Gorgon shutdown

Chevron may need to temporarily halt production at its Gorgon gas plant after being ordered by government regulators to undertake further inspections and repairs.

The Department of Mines Industry Regulation and Safety announced on Friday afternoon that it has issued two sets of work orders.

The department’s review followed Chevron’s discovery of multiple cracks in the propane heat exchangers on ‘train’ 2, which is one of three processing lines at Gorgon.

The heat exchangers, or kettles, are used to heat the propane, as part of the process of producing liquefied natural gas (LNG).

The cracks in the high-pressure heat exchangers have raised concerns about leaks and possibly an explosion.

The department’s Dangerous Goods Directorate has issued a remediation notice to inspect the propane heat exchangers on Gorgon’s two other processing lines - trains 1 and 3 - no later than 21 August. 

The Directorate said it issued the notice as trains 1 and 3 may have similar defects to the reported cracking in train 2.

That’s because all of the units were manufactured at the same factory in South Korea.

In addition, the department’s WorkSafe unit has issued a total of 36 improvement notices.

This includes eight notices specifying that the propane kettles on train 2 had been manufactured differently to the registered design.

Chevron has until 28 August to make modifications to the vessels on train 2 to make them compliant with the relevant standards.

The US-based oil and gas giant is already undertaking repairs to train 2, which was shut down in May as part of its scheduled maintenance program.

It said last week in an earnings call that it expected to re-start train 2 in early September.

WorkSafe said on Friday it has issued a further 24 improvement notices in relation to the vessels on train 3.

Chevron needs to inspect and, if necessary, repair the vessels on train 3 by 24 September.

WorkSafe director Sally North said its investigation was continuing.

Chevron is understood to be assessing whether it will need to temporarily shut down trains 1 and 3 to complete the inspections it has been ordered to undertake.

If damage similar to train 2 is discovered, it is expected a lengthy shutdown will be required so welding repairs can be undertaken.

A Chevron spokesperson said appropriate safety measures are in place and it remains committed to operating safely and reliably.

Dangerous Goods and Petroleum Safety director Steve Emery said the department continues to take the matter seriously and is in close contact with Chevron.

“The short-term measures Chevron has taken to mitigate the consequences of any potential gas leaks appear sufficient until the welds are inspected,” Mr Emery noted.

The Gorgon LNG plant, on Barrow Island off the Pilbara coast, was Australia’s largest single resources development, costing in excess of $50 billion.