US energy giant Chevron, the operator of the Gorgon and Wheatstone projects in Australia and the Angola LNG plant, is looking to further boost its LNG position as Europe looks to secure additional supplies.
“So LNG is on everybody’s mind these days. It’s important to meeting Europe’s needs. It’s important to delivering a lower carbon energy system globally, and we see this strong market here in the near term,” Chevron’s CEO Mike Wirth told analysts during the company’s first-quarter earnings call on Friday.
Wirth said Chevron would like to grow its LNG position as the “world needs it”, but “it’s got to compete for capital.”
“We got a number of options in the Eastern Mediterranean. We’re talking to some people here in the US. You may have seen media reports that we have been talking to people in the Middle East about expansion projects there. So we’re evaluating a number of different opportunities,” he said.
US LNG export
These developments include the Leviathan project in Israel which could have a floating LNG plant or deliver gas to other liquefaction facilities in the region.
Chevon is also looking at US LNG export opportunities as the firm has significant acreage in the US.
Wirth said that Chevron has got a “lot of gas production” in the US that largely prices at Henry Hub today.
“And there are these projects that are in the process for LNG export facilities. We’ve had discussions with a number of those developers, nothing to say more than we’ve had discussions at this point,” the CEO said.
“But that’s part of our LNG portfolio that we’ve been very focused on the Pacific Basin historically. And as the Atlantic Basin markets now look a little bit different as we flow gas from our West African assets into the Atlantic Basin, it may make sense for us to have some US supply as well,” Wirth said.
Earlier this year, Wirth said Chevron expects to have “strong” operational performance this year at its 15.5 mtpa Gorgon LNG facility in Western Australia, following several train shutdowns during the last two years.
The firm completed major turnaround on all three trains.
Chevron also conducted asset integrity work across the three Gorgon trains, not related to incident.
“A little bit of that came into the first quarter of this year,” Wirth said on Friday.
Besides Gorgon, Chevron is also working on its 8.9 mtpa Wheatstone LNG plant near Onslow in Western Australia.
“Wheatstone has a turnaround underway right now of one of the two trains and also the offshore platform and some common facilities,” he said.
“The good news is that part of the turnover is behind us right now. And we’re in the process of resuming production at one of the two trains there at Wheatstone and should have first LNG any day now,” Wirth said.
“And actually, the second train will be early May,” he added.
Angola LNG maintenance
Chevron is also looking to start maintenance at the 5.2 mtpa LNG export plant in Soyo, Angola in the second quarter of this year.
“Second quarter takes all the planned turnaround activity essentially or the majority of it,” he said.
In the first quarter, Angola LNG returned over $500 million of capital to Chevron.
“That’s a function of operating an LNG facility and selling it into the European gas markets at TTF prices. However, adjusted to the accounting rules, it’s flowing through cash from investing and not cash from ops. But for all intents and purposes, it is operating cash flow,” finance chief Pierre Breber said during the call.