Chevron raises cost estimate for Gorgon to $54bn
JOHANNESBURG (miningweekly.com) – US energy major Chevron has raised the price tag of the Gorgon liquefied natural gas (LNG) project by $2-billion to about $54-billion.
Earlier this year, the project, which is jointly owned by Chevron, ExxonMobil, Shell, Osaka Gas, Tokyo Gas and Chubu Electric Power, faced a foundation cost increase from A$43-billion to A$52-billion.
Despite the cost increase, Chevron vice chairperson George Kirkland said that the Gorgon project economics remained attractive.
The project construction was nearly 75% complete and the plant start-up and first LNG was planned for mid-2015.
“We continue to make steady progress against key project milestones and are applying lessons learned to our Wheatstone development, which is almost 25% complete.”
Kirkland noted that some 75% of Chevron’s combined LNG offtake from the two projects was committed under firm, long-term sales and purchase agreements.
“These LNG developments are two of our most important future legacy assets, representing approximately 400 000 bbl/d of net production at full capacity. They will be substantial contributors to our cash flow for decades to come.”
The Gorgon project includes the construction of a three-train 15.6-million-tonne-a-year LNG plant on Barrow Island with the capacity to supply 275-million standard cubic feet per day of natural gas to the Western Australian market.
When the project is complete, about three LNG shipments a week are expected to be loaded via a 1.3-mile-long LNG jetty to transport to Asian markets.
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