http://www.upstreamonline.com/live/article1269914.ece?goback=%2Egde_2967799_member_185620413
The cost for the Gulf LNG Project will be contained as compared to Gorgon … or even as compared to PNG LNG.
- Only a few production wells and water re-injection wells
- Short pipelines
- No labor issues
- Few if any landowner issues
- Few if any environmental issues
By Josh Lewis & news wires
14 November 2012 02:44 GMT
The cost of Chevron’s massive Gorgon liquefied natural cost project in Western Australia could rise as much as A$20 billion (US$20.9 billion), according to reports.
The Australian Financial Review cited several sources with knowledge of Chevron’s current cost review of Gorgon as saying the US supermajor was expected to reveal the cost blow-out before year end.
Chevron’s current cost estimate for the 15 million tonne per annum LNG project is about US$37 billion.
The paper cited the high Australian dollar, union demands, high-cost local manufacturing and productivity issues as the reasons behind the expected cost increase.
Chevron’s general manger for operations in Australia, Brian Smith, told an industry conference in the West Australian capital city of Perth on Tuesday that he did not want to speculate on the extent of any possible cost increases.
“The cost is still the same number at this point in time,” he said.
“It may well be in the future or it might be some other number, but right now that is the cost for Gorgon.
“I think it’s no surprise that the exchange rate has gone up and is higher than when the project was approved. [But] we’re not going to speculate on what that number is. At least I’m not, I’m in operations.”
Smith also told delegates at the Australian Resources Conference that Gorgon was about 50% complete and on schedule to deliver first gas in 2014.
However, the Australian Financial Review claimed the cost review Chevron launched in July was expected to also reveal delay to the schedule of first gas.
Chevron operates the Gorgon project, holding a 47.33% stake, and its partners include ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.42%).
The project is aimed at developing the Greater Gorgon Area gas fields, which lie about 130 kilmoetres off the north-west coast of Australia.