Chevron has confirmed an expansion of the Gorgon LNG project is on hold until the joint venture knows how much the three-train start-up development on Barrow Island is going to cost.
And, highlighting the enormity of Gorgon's cost pressures, Chevron warned a fourth train was no longer a certainty, despite the attraction of such a brownfields development, and needed to compete with "other opportunities that we have got in our (global) portfolio".
Chevron chief financial officer Pat Yarrington said that though the Gorgon joint venture, which includes ExxonMobil and Royal Dutch Shell, remained keen on eventually building a fourth train to expand the foundation project's 15.6 million-tonne-a-year LNG capacity, "everybody wants to get an understanding of the cost structure".
"We are all interested certainly in seeing this (Train 4) continue to progress," Ms Yarrington told investors during a conference call in the US on Friday night.
"I think all of the JV partners are interested, though, in seeing Train 1 come up and seeing progress on 2 and 3 et cetera.
"I also think it's fair to say that the cost structure in Australia is different now than it was when (a final investment decision on) Train 1 was taken (in 2009).
"The cost structure has elevated. And I think it's fair to say that that has put at risk some of Australia's global competitiveness."
Ms Yarrington said Chevron was still finalising next year's budget and, in response to a question about Gorgon's schedule, said "should there be any reviews during that that suggest a material change, other than what we said previously, we will certainly bring that to your attention".
It is expected Chevron will announce another budget blowout for Gorgon.
Two months ago _WestBusiness _ reported that Chevron had asked its Gorgon team to "value-engineer" after internal estimates put the project's cost at as much as $US59 billion. Chevron has refused to discuss the report.
Last December, Chevron used the announcement of its year-ahead group capital expenditure budget to confirm Gorgon's cost had risen from $US37 billion to $US52 billion. Its annual investor conference in March is another appropriate time for it to update shareholders on project costs.The Gorgon and Io-Jansz fields contain enough gas to support a fourth LNG train but ExxonMobil and Shell, in particular, are understood to be concerned about the cost.