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Gorgon tests Chevron as phase two nears

Subsea contractors prepare bids for offshore installation contract but Train 1 gremlins continue to plague US supermajor

SIX major subsea contractors are competing for an offshore installation job linked to the second upstream phase of Chevron’s Gorgon liquefied natural gas project in Western Australia — as the US supermajor deals with another glitch on its first liquefaction train. 

The second phase project will involve the drilling of additional wells and the installation of subsea infrastructure and infield flowlines at the existing Gorgon and Jansz-Io gas fields.

The six companies invited to bid are Allseas, Hereema Marine Contractors, McDermott, Saipem, Subsea7 and Technip.

The workscope is understood to include the installation of 18-inch and 24-inch flowlines and buckle initiators including pipeline end termination structures; 6-inch and 8-inch mono ethylene glycol pipelines and 6-inch utility pipelines.

A whole raft of other structures and tie-ins are required in water depths between 250 metres and 1338 metres.

Umbilical installation will be needed, as well as pre-commissioning comprising flood, gauge and pressure testing of the pipelines, pressure testing of the spools and jumpers, flowline dewatering and conditioning in readiness for start-up, and control system continuity and function testing.

It is understood that output from the new wells and subsea facilities will be channelled through the main production pipelines at Gorgon and Jansz-Io.

Another big contract linked to phase two is a large subsea production system which has not as yet been tendered, said sources. GE Vetco Gray provided the subsea production system for the Gorgon foundation project.

Chevron said recently that front-end engineering and design work had started on the second phase.

The initial focus for stage two is to maintain supplies into the first three liquefied natural gas trains at Gorgon.

More immediately, operator Chevron is experiencing another headache with the Gorgon liquefaction plans where its first train has been shut down for the fifth time since starting up last year.

A Chevron spokesperson confirmed that output at Train 1 was halted late last week and is expected to remain offline for about a month. 

"Production on Gorgon Train 1 was stopped on 12 May due to a failure of a flow measurement device,” the spokesperson said. “Train 1 is expected to be down approximately one month for this replacement and we will take this opportunity to perform other routine maintenance.”

The spokesperson added that Gorgon's remaining two trains were running normally and that cargoes were continuing to be shipped from the LNG plant on Barrow Island.

The shutdown is the latest setback at Gorgon with Train 1 suffering four previous outages since coming online in March last year, while Train 2 was shut down in March this year to address an issue with the flow measurement apparatus.

In an earnings call last month, president of Chevron Asia Pacific Exploration & Production, Stephen Green said the problems with the flow measurement device at Train 2 had previously been dealt with at Train 1.

The Chevron spokesperson did not elaborate in their comments to Upstream this week on whether the latest failure of the flow measurement device at Train 1 was related to earlier shutdowns or if it was expected to affect the other trains.

It was also suggested this week that Chevron could see the first cargo from its other West Australian LNG project, Wheatstone, slip back.

The operator has been targeting to ship the first cargo from Wheatstone by mid-year but the chief executive of joint venture partner Woodside Petroleum told media on the sidelines of this week's APPEA conference in Perth that it might not ship until August.

"We are at that point where it's really difficult to predict because at any point you may have to circle back and redo something... there's very little float left in a kind of July cargo," Peter Coleman said.

"If you were to say where do you think its heading? Probably August given that something will likely occur as you go through there," he added.

However, Coleman did not entirely rule out the first cargo still meeting the operators mid-year target and shipping in July.

"If it's July it just means everything has gone perfectly well and we will give ourselves a lot of credit for it but the reality is its probably slipping out the back-end," he added.

A Chevron spokesperson reiterated to Upstream the comments made during the company's quarterly earnings call last month where it stated its outlook for first LNG remained mid-2017.