American energy company Chevron has started shipping its first cargo of liquefied natural gas (LNG) from the $54bn Gorgon project to Chubu Electric Power of Japan.


The cargo will be delivered through new LNG carrier Asia Excellence from the project located on Barrow Island off the northwest coast of Western Australia.

Earlier this month, the company had started production from the project after facing delays and rise in construction cost.

Chevron midstream and development executive vice president Mike Wirth said: "Departure of the first cargo from the Gorgon Project is a key milestone in our commitment to be a reliable LNG provider for customers across the Asia Pacific region.

"This is also important for our investors as we begin to generate revenue from a project we expect will operate for decades to come."

To strengthen its position as a major LNG suppler, Chevron Shipping Company is in the final stages of its largest shipbuilding and fleet modernization program. The program aims to add six new LNG carriers to its existing fleet.

The supply of for its Gorgon project comes from the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 80 miles (130 km) and 136 miles (220 km) off the northwest coast of Western Australia.

It also includes a 15.6 MTPA LNG plant on Barrow Island, a carbon dioxide injection project and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.

The project was estimated to cost $37bn in 2009 but the cost has gone up since then. Chevron is expecting that the all the three will reach full capacity by the second half o f2017.

The project’s cost ballooned from an estimate of, when the companies decided to go ahead with the venture. The development is expected to reach full capacity at its three production facilities, known as trains, by the second half of 2017,

The Gorgon project is a joint venture between Chevron and its Australian subsidiaries. Chevron is the operator of the project, owing a stake of 47.3%. ExxonMobil and Shell hold a stake of 25% each, while Osaka Gas, Tokyo Gas and Chubu Electric Power have minor share in the project.

Earlier this year, Chevron signed an agreement to supply LNG to China-based ENN LNG Trading (ENN) for ten years from the Gorgon project.

ENN is expected to buy up to 0.5 million metric tons per annum (MTPA) of LNG beginning in 2018 or the first half of 2019.

Previously, Chevron also agreed to supply one MTPA of LNG to China Huadian Green Energy for over ten years starting in 2020 from the Gorgon and Wheatstone LNG projects.

Image: The Asia Excellence loading the first Gorgon liquefied natural gas (LNG) cargo for delivery into Japan. Photo: courtesy of Chevron Corporation.