Strong Aussie Dollar, Logistics Problems Cause Jump in Chevron’s Gorgon Project to $52B from $37B
By Vittorio Hernandez | February 4, 2013 2:13 PM EST
U.S. oil giant Chevron's expenses to build the Gorgon natural gas project in Australia has gone up by $15 billion. The company blamed the rise to $52 billion from $37 billion to the high Australian currency and extra logistics.
The Australian dollar was trading 86 U.S. cents in 2009 when Chevron got the green light to proceed with Australia's largest natural gas project. On Sunday, the exchange rate was at $1.04, explained Chevron Chief Executive John Watson.
He identified the extra logistic problems as cost blowout in transporting large volumes of construction materials to Barrow Island where Chevron is construction a liquefied natural gas facility. Gorgon is 130 kilometres off the north-west coast of Western Australia.
Due to the cost blowout, Royal Dutch Shell, Chevron's partner in the Australian venture, indicated it may place more investments in Gorgon. Chevron owns 47.3 per cent of Gorgon, while Shell and ExxonMobil have 25 per cent stakes each.
As of end of 2012, Gorgon was 55 per cent complete, Mr Watson disclosed.
He added that bad weather also affected the construction of the beds and other facilities and infrastructure during the early days of the LNG project.
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