Royal Dutch Shell Plc  .com Rotating Header Image Chevron seeks to expand Gorgon LNG project

4th January 2008, 15:00 WST
Chevron will work to secure government approval for a 50 per cent expansion of the Gorgon liquefied natural gas project over the next twelve months, the company has announced.

The venture will over the next year start initial engineering work for the delayed project and consider early site preparation work, Scott Walker, a spokesman for Chevron’s Australian unit, said today in an e-mail.

He declined to say when the venture will commit to building the plant.

The Gorgon partners, including Exxon Mobil and Royal Dutch Shell got final environmental approval from the Australian government to build two LNG processing units in northern WA in October.

They now require additional approval for a third unit, or “train,” that will increase annual capacity to 15 million metric tons from the originally planned 10 million.

“During the next 12 months, the project will be working with government to secure approvals for the additional train, commence front-end engineering and design, expand the capacity of the project team and consider early works on Barrow Island,” Walker said in the e-mail.

Chevron, based in San Ramon, California, will early this year submit an environmental assessment to the Environmental Protection Authority for approval to build the extra unit on the Barrow Island nature reserve, Mr Walker said.

The original approval was opposed by environmental groups including WWF-Australia, which said the risks to species found on the island and nowhere else in Australia “are simply too great”.

The company hasn’t given a revised cost estimate for the expanded project or said when production may begin.

In 2006 it dropped a 2010 estimate for the start of deliveries and last March threw out a $10.4 billion budget for the project after a surge in construction costs.

“Chevron, Exxon Mobil and Shell are committed to progressing the project and are continuing to examine opportunities to reduce execution costs and uncertainty,” Mr Walker said today.

Last month Exxon signalled production at the LNG venture may start in 2014, as many as four years later than Chevron’s most recent estimate.

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