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Chevron says Gorgon LNG cost review to take few more months

BY ROSS KELLY 

SYDNEY -- Chevron said it would continue to evaluate the cost of developing the Gorgon LNG project over the next few months, without saying whether the current $44.9 billion price tag would change.

Chevron' s comments came after the Australian Financial Review newspaper reported  that the project faced a cost increase of more than $20 billion due to the strength of the local currency and construction delays. Investors are anticipating a substantial increase after Chevron said in July it was reviewing the cost of Gorgon, which also counts Exxon Mobil and Shell as large investors. A Chevron spokesman said in an emailed statement that the cost review for the project, located on Barrow Island in Western Australia state, was ongoing.

"Uncertainty and opportunity still exist in some key assumptions including logistics, productivity and weather and we are evaluating these assumptions based on actual performance and will continue to do so over the next few months," the spokesman said. Citing unidentified sources which it said have knowledge of Chevron' s current cost review, the Financial Review report said the company was poised to announce the increase from the current budget of $43 billion by the end of the year.

11/15/2012

 

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