Chevron insisted yesterday its 15.6 million tonne a year Gorgon LNG project remained on track to be finished by late 2014 despite speculation the US giant will within months announce a cost blowout at the $43 billion development.
A review is already under way into Gorgon's budget and schedule, with Chevron's board earlier this year warning of significant headwinds because of labour costs and a strong Australian dollar.
When Chevron and partners ExxonMobil (25 per cent) and Royal Dutch Shell (25 per cent) sanctioned Gorgon's development in September 2009, they tipped a $US37 billion cost that at the time was equivalent to $43 billion in Australian terms. The dollar has strengthened significantly since, from US86¢ to $US1.04 last night.
Chevron has remained silent on the status of the Gorgon review.
Analysts have tipped a revised budget of as much as $US60 billion based on cost blowouts at other completed and yet-to-be-finished LNG developments in Australia, led by Woodside Petroleum's Pluto venture, which was a year late and 25 per cent over budget.
Addressing a conference in Perth yesterday, Chevron's Australia general operations manager Brian Smith said Gorgon remained "on schedule for first LNG in late 2014".He said the project, based on tapping the Gorgon and Jansz-Io fields off the Pilbara coast and piping the gas to Barrow Island for processing, was 50 per cent complete. Nine thousand workers were involved in Gorgon's construction, including 4000 on Barrow Island.