Chevron ordered to inspect propane kettles at Gorgon LNG plant in Australia

(Reuters) – Chevron Corp (CVX.N) was ordered on Friday to inspect the propane heat exchangers on two of the three trains at its Gorgon liquefied natural gas (LNG) plant in Australia following safety concerns raised by a trade union.

Western Australia’s industrial safety regulator said the inspection orders were for trains one and three and had to happen before August 21.

It was not immediately clear whether Chevron would have to shut down trains 1 and 3 at the 15.6 million tonnes a year plant, one of the world’s largest LNG projects, to conduct the inspection and any necessary repairs.

“We are evaluating, based on the learning that we’ve got, how to best address trains 1 and 3,” Chevron Vice President Jay Johnson told analysts on an earnings call on July 31.

Last month, Australia’s Department of Mines, Industry Regulation and Safety (DMIRS) said it would inspect the plant following calls by a trade union to shut it down, after the company reported it had found a weld problem in the propane kettles on train 2 while the unit was undergoing maintenance.

The department’s Dangerous Goods and Petroleum Safety Director Steve Emery said in a statement that the nature of reported cracking in train two could mean “there may be similar defects in trains one and three”.

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

Chevron confirmed it received the notices from the regulator relating to improvements on the propane heat exchangers of Gorgon train 2 and remediation notices for trains 1 and 3.

“We are working closely with the regulator in planning and implementing repair work at Gorgon that was identified by Chevron in a safe and efficient manner,” the company said in an email.

Chevron said it planned to restart train 2 in early September after completing repairs.

Gorgon is 47.3% owned and operated by Chevron. Exxon Mobil Corp (XOM.N) and Royal Dutch Shell (RDSa.L) each own 25%, and the rest is held by Japanese firms.