Chevron's $54b Gor­gon LNG pro­ject starts

The Pak Banker - - COMPANIES/BOSS -

LON­DON: Chevron Corp.'s $54 bil­lion Gor­gon liq­ue­fied nat­u­ral gas pro­ject, the largest re­source de­vel­op­ment in Aus­tralia's his­tory, has started pro­duc­ing the su­per-cooled fuel. The LNG pro­ject, whose part­ners in­clude Royal Dutch Shell Plc and Exxon Mo­bil Corp., is due to ship its first cargo next week, San Ra­mon, Cal­i­for­nia-based Chevron said in a state­ment. The de­vel­op­ment is lo­cated on the Bar­row Is­land na­ture re­serve off northwest Aus­tralia.

Gor­gon is start­ing as weaker oil prices threaten rev­enue pro­jec­tions for LNG ex­port de­vel­op­ments, which typ­i­cally have long-term sales con­tracts tied to the value of crude. The Aus­tralian pro­ject will add to a wave of new sup­ply, in­clud­ing the first de­liv­er­ies from the U.S., as de­mand in Asia slows. The pro­ject's cost bal­looned from an es­ti­mate of $37 bil­lion when the com­pa­nies de­cided to go ahead with the ven­ture in 2009. The de­vel­op­ment is ex­pected to reach full ca­pac­ity at its three pro­duc­tion fa­cil­i­ties, known as trains, by the se­cond half of 2017, the com­pany said in an e-mail Tues­day.

Aus­tralia is fore­cast to over­take Qatar in 2018 to be­come the world's largest LNG ex­porter, ac­cord­ing to the Aus­tralian Pe­tro­leum Pro­duc­tion & Ex­plo­ration As­so­ci­a­tion. At the end of the decade, Aus­tralia will have 10 gas-ex­port projects pro­duc­ing more than 85 mil­lion met­ric tons a year of LNG, it said.

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