Chevron works to normalize Wheatstone production after 25% LNG output impacted

Chevron is working to normalize its Wheatstone gas facility operations after facing a fault, which has impacted 25% of its LNG production, a Chevron Australia spokesperson told S&P Global Commodity Insights Sept. 14.

"Chevron Australia is working to resume full production at the Wheatstone gas facility following a fault, which has impacted about 25% of LNG production," the spokesperson said.

"The cause has been identified and restart activities have commenced," said the spokesperson, adding that "domestic gas facilities are unaffected."

It was not immediately clear what impact the Wheatstone facility fault will have on its LNG shipments from the 8.9 million mt/year LNG facility over two trains.

The news of 25% LNG production impact at the Wheatstone gas facility comes after two sources with direct knowledge of the matter told S&P Global earlier Sept. 14 that LNG production at the Gorgon and Wheatstone projects in Australia has not been affected despite escalating strikes.

"The 1411 turbine has tripped on the Wheatstone downstream facility and one of the trains is now down to 50% capacity," the Offshore Alliance said in a Facebook post Sept. 14.

"All of this kicked in whilst the plant was being manned by Chevron's inexperienced and non-competent BCP workforce," the Offshore Alliance said. "We're only just getting started with our Protected Industrial Action."

Escalating strikes

LNG production impact at the Gorgon and Wheatstone facilities has been closely watched in Asia and Europe in recent weeks as the unions said complete stoppage of works could occur up to 24 hours a day from 6 am Australian Western Standard Time (2200 GMT Sept. 13) Sept. 14.

When asked whether its members have stopped working completely as planned, the Offshore Alliance told S&P Global earlier Sept. 14 that "Offshore Alliance members in the many different work areas across the three separate facilities are meeting regularly to determine what action they will take as a team."

"That strike action could take many forms from single one hour stoppages to longer action, and this action may differ from team to team, or it could be collective action consistent across all 500 members."

The Offshore Alliance is an alliance between the Australian Workers' Union and the Maritime Union of Australia.

"Our focus is on maintaining safe and reliable operations in the event of disruption, and we will continue to manage the range of uncertainties that industrial action may present," another Chevron Australia spokesperson said earlier Sept. 14.

In a separate Facebook post Sept. 14, the Offshore Alliance also said that the alliance's lawyers have put Chevron on notice regarding alleged coercive conduct by Chevron bosses on the Gorgon and Wheatstone facilities.

"Amongst other things, the union's lawyers have given Chevron until 12:00 tomorrow [0400 GMT] to give written confirmation to the union that they will stop making unlawful threats to Offshore Alliance members regarding pay deductions during periods of Protected Industrial Action," the alliance said.

However, the Chevron Australia spokesperson late Sept. 14 rejected claims that the company was acting unlawfully.

"Chevron Australia has asked employees to let their supervisor know if they do not intend to participate in the industrial action notified by the unions. This is to ensure that we appropriately pay employees for that work," the spokesperson said. "We respect the right of employees to take protected industrial action."

S&P Global reported Sept. 13 that sellers of Gorgon and Wheatstone LNG told at least one Japanese buyer that their LNG supply will not be affected by escalating industrial action at the Australian facilities.

The Offshore Alliance started its PIA at the Chevron-operated Gorgon and Wheatstone LNG facilities Sept. 8 and said its members will stop work completely for two weeks from Sept. 14 as part of the PIA.

Japanese buyers are foundational customers for the Gorgon and Wheatstone projects, which are among Australia's largest resource developments. The Gorgon project comprises a three-train, 15.6 million mt/year LNG facility and a domestic gas plant, while the Wheatstone project has a nameplate capacity of 8.9 million mt/year of LNG and a domestic gas plant.

Japanese LNG lifting volumes account for 30% of Gorgon output and 83% of Wheatstone output, according to S&P Global calculations based on industry information.