Chevron's Gorgon project cost up 40% to $52 billion
PERTH -- The estimated price tag for Chevron massive LNG project called Gorgon off the coast of Western Australia has risen by about 40% to $52 billion for the multi-year effort, Raymond James analyst Pavel Molchanov said in a note to clients. Overall, the cost increase is "by no means great" but "not as bad as what had been rumored," he said.
Chevron disclosed plans for a review of the Gorgon costs, following price hikes in the Australian resource sector. "While the 40% escalation in costs is obviously not what Chevron or the other project partners would hope for, let's point out that the price of Tapis crude against which Gorgon LNG offtake deals are benchmarked is up 80% over the same timeframe," he said.
Dow Jones Newswires