- Tucked away inside Chevron's (CVX -0.6%) announced $39.8B 2014 capex budget is another cost blowout on the development of its Gorgon LNG project in Australia: The latest estimated cost is $54B, vs. a $52B estimate offered a year ago and $37B when the final investment decision was taken in 2009.
- The timetable for first gas from Gorgon, which will have the capacity to produce 15.6M metric tons/year, slips to Q1 2015 from the original 2014 target.
- CVX says the project's economics remain attractive, following a sharp increase in oil prices since construction began; Gorgon's Asian customers are locked into contracts typically lasting 20 years that are linked to the fluctuating price of oil.
- Operator CVX owns 47.3% of Gorgon, while Shell (RDS.A, RDS.B) and Exxon Mobil (XOM) each hold 25%.
Chevron's Gorgon LNG project blows out by another $2B, now at $54B
Dec 12 2013, 10:25 ET