Chevron says cost of gas project in Australia surged 21 percent
BY Staff and Wire Reports
Thursday, December 06, 2012
12/06/12 at 2:23 AM
Chevron Corp. says the cost of its Gorgon natural gas development, the largest natural resources project in Australia's history, has jumped 21 percent to $54 billion on local currency gains and higher labor expenses.
Gorgon, off northwest Australia, is expected to deliver its first liquefied natural gas shipments in the first quarter of 2015 after the LNG plant starts in late 2014, according to San Ramon, Calif.-based Chevron.
Although the Australian dollar has risen 15 percent against the U.S. dollar in the past three years, oil prices, which drive Gorgon's revenue, have increased about 80 percent since the project was approved in 2009, said George Kirkland, vice chairman of Chevron.
The capacity of the project on Australia's Barrow Island has climbed by 4 percent to 15.6 million metric tons a year, he said.
Gorgon is among seven LNG ventures being built in the country to meet rising demand in Japan, China and South Korea.
George Kirkland: Chevron's vice chairman says rising oil prices since 2009 have increased costs in Australia.