Gorgon LNG Cost Expected to Rise to $52 bn

Chevron has announced that total cost of its three train Gorgon LNG project has increased from AU$43 billion ($37 billion) to AU$52 billion ($52 billion). The project is approximately 55 percent complete and plant startup is planned for late 2014, leading to the first LNG cargo in the first quarter 2015.

“The factors contributing to the increased costs and schedule impacts include labor costs and productivity associated with Barrow Island site infrastructure, logistics challenges and weather delays,” the company said. Appreciation in the Australian dollar too has added to the cost.

"Gorgon project economics are attractive," said Vice Chairman George Kirkland. "While investment requirements have grown, oil prices, which directly impact the overall revenue stream, have increased by approximately 80 percent over the same time period. In addition, the LNG nameplate capacity has increased by 4 percent to 15.6 million tons per year."

Kirkland added, "Our exploration program continues to discover additional gas resources that could support future expansions of our Australian LNG developments. The Wheatstone LNG project is currently 7 percent complete and is on budget and on schedule."