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UpstreamOnline: Chevron takes Gorgon pain

By Upstream staff

US supermajor Chevron said it remained committed to the Gorgon liquefied natural gas project off Australia despite concerns about rising costs at the $20 billion project, local media sources said.

Gorgon general manager Colin Beckett told Australia’s The Age newspaper: “We are ramping up our manpower and investment spend as we speak. We wouldn’t do that if it was not seen to be a robust use of our funds.”

However, Beckett admitted that the project was also feeling the heat from cost increases including higher labour and supplies costs.

Exploitation of the Gorgon reserves is complicated by the high carbon dioxide content of gas. Beckett said Chevron had spent more than $60 million on a well to study reinjecting recovered carbon dioxide into an underground salt chamber.

He said the project was spending about $20 million a month on construction costs.

Australia’s federal government last month approved the building of two LNG compression trains for the project on Barrow Island, off Western Australia. However, Chevron’s partners in the project, fellow supermajors Shell and ExxonMobil have not yet given the nod for work to begin.

The trains will produce about 10 million tonnes of LNG a year from the Gorgon and Jansz fields. Beckett told The Age that there was space for a further three trains on Barrow Island.
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19 November 2007 23:25 GMT  | last updated: 19 November 2007 23:25 GMT

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