Cost of Chevron's Gorgon LNG Project Jumps to $54 bn

Chevron has increased the cost estimates for under construction Gorgon LNG project in Western Australia to $54 billion from earlier estimate of $52 billion.

“In Australia, the Gorgon project has been under construction for four years and is almost 75 percent complete. The current estimate for the cost of the foundation project is $54 billion, with plant startup and first gas planned for mid-2015,” the company said in a statement. 

"Gorgon project economics are attractive," said Vice Chairman George Kirkland. "We continue to make steady progress against key project milestones and are applying lessons learned to our Wheatstone development which is almost 25 percent complete. Approximately 75 percent of our combined LNG offtake from the two projects is committed under firm, long-term sales and purchase agreements."  

The company expects 2014 to be the peak year for spending on its Australian LNG projects as it moves them closer to first production.

The Gorgon Project is developing the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 130 and 220 kilometres off the northwest coast of Western Australia.

It includes the construction of a 15.6 million tonne per annum (MTPA) liquefied natural gas (LNG) plant on Barrow Island and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.

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