San Ramon, CA, United States (4E) – Chevron Corp. said that Gorgon, the world’s biggest liquefied natural gas (LNG) development, has fallen further behind schedule and over budget.
Chevron’s estimated cost for the big Gorgon development, which the company started building in 2009 to cater Asia’s growing demand for cleaner-burning fuels, has climbed by $2bn to $54bn, according to the oil and gas company leading the Australian project.
Chevron said that the first deliveries of LNG are now expected in the middle of 2015, a delay of several months from its previous target of the first quarter of 2015.
Chevron’s announcement came after General Motors Co. said it would halt manufacturing operations in Australia by 2017 because of the rising local currency and intense competition in the Australian automobile market. A strong Australian dollar allows cheaper importation of competing products overseas by GM’s rivals, while making the costs for locally sourced equipment and labor higher.
The second-largest U.S. oil company by output disclosed the latest delays and rising cost at Gorgon as it seeks to reduce its overall capital spending in 2014. Chevron plans to invest $39.8bn next year, lower than $42bn in 2013.