UPDATE 1-Chevron says Australia's Gorgon LNG is 50 pct complete

Tue Nov 13, 2012 2:41am EST

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PERTH Nov 13 (Reuters) - Chevron's $37 billion Gorgon liquefied natural gas (LNG) development is now 50 percent complete, and still on track to go on line in 2014, a senior executive said on Tuesday.

Gorgon LNG, the company's flagship development, is currently undergoing a cost and schedule review as costs at other Australian LNG developments have been growing rapidly due to a high Australian dollar and the rising local price of doing business.

"It's no surprise that you would do (a review) on Gorgon," Chevron Australia's General Manager of Operations, Brian Smith, said at an industry conference in Perth, but added that the project is still expected to cost $37 billion, although he hinted that the current estimate may change.

"The cost is still the same number at this point of time. It may well be in the future that we may mention some other number... the exchange rate has gone up, it's higher than when project was approved," Smith said.

LNG plants are notorious for running over budget and missing schedules. In Australia, three out of seven projects under construction have announced cost increases of more than 20 percent.

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