Gorgon facing $20.9bn cost blow-out

Cost blow-out: Gorgon LNG project costs may rise more than A$20 billion

KENTZ

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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…

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