Australia’s largest gas project Gorgon is almost 80 per cent complete, with two thirds of the gas already committed to buyers.
In an investor update Chevron, the lead operator of the joint venture project, said offshore pipelaying was now complete and 65 per cent of the liquefied natural gas (LNG) from Gorgon had been committed under long-term contracts.
The cost of the energy giant’s LNG project in Western Australia has blown out by $US2 billion to $US54 billion.
Also, the start-up date for first gas from Gorgon has been pushed back to mid-2015, instead of the first quarter.
US-based Chevron declined to specify an exact start-up date, instead saying that Gorgon and the company’s nearby Wheatstone LNG projects were scheduled for start-up by 2016.
The original budgeted cost of Gorgon was $US37 billion when it was given the green light in 2009.
Chevron now says Gorgon is 78 per cent complete while the smaller but still large $A29 billion Wheatstone project is 30 per cent complete.
Wheatstone’s wharf is operational and development drilling is underway.
Gas marketing is more advanced at Wheatstone, with 85 per cent of the project’s LNG committed under long-term contracts.
The two projects will produce 400,000 barrels a day at full capacity.
Chevron added that its global spending on LNG will peak this year at about $US10 billion, largely due to Gorgon and Wheatstone.
Almost 10,000 people are working on constructing the two massive joint venture LNG projects, with 6000 people working on Gorgon at Barrow Island and 3800 people on site at Wheatstone.
Chevron also predicts global LNG demand will almost double by 2025, with more than 100 million tonnes a year of new supply required to meet the world’s energy needs.
LNG is tipped to replace iron ore as Australia’s top earning export within two decades.
Chevron’s update comes a fortnight after former Labor resources minister and union boss Martin Ferguson blamed the WA maritime union for massive cost blowouts and delays to Gorgon.
