* Gorgon LNG 60 pct complete, Wheatstone 10 pct - Chevron
* Australia's high costs could impact future investments -
BRISBANE May 28 Chevron Corp's $52
billion Gorgon liquefied natural gas (LNG) development in
Australia is now 60 percent complete and plans are afoot to
start engineering and design work for an expansion by the end of
the year, a company executive said.
Chevron also continues to talk with third-party gas
suppliers for a potential expansion of its $29 billion
Wheatstone LNG plant, Roy Krzywosinski, managing director of
Chevron Australia, told reporters at an industry conference in
Brisbane on Tuesday.
The Wheatstone plant in Australia is about 10 percent
complete, he said.
The U.S. company's plans to continue pursuing LNG capacity
expansion come amid concerns that Australia's high cost
structure will discourage further investment in the $190 billion
Woodside Petroleum last month shelved plans for its
$45 billion Browse LNG project in Western Australia, saying it
will consider a floating LNG plant after deciding the onshore
development did not make economic sense.
Gorgon, which will have a capacity of 15.6 million tonnes of
LNG per year, is currently on schedule to ship its first LNG
cargo in early 2015. The expansion is expected to add another
5.2 million tonnes a year.
Chevron is building a plant with a capacity of 8.9 million
tonnes at Wheatstone, but the site has government approval to
grow to a 25 million-tonne hub. Wheatstone is scheduled to ship
its first cargo out in 2016.
Krzywosinski, however, warned that Australia's high costs
could impact the company's investment decisions going forward.
"Nothing is a slam dunk... the issue of cost structure is a
significant issue, especially if you have an international
portfolio of competing priorities," he said.
"You're not going to dump more money into an existing
investment if you have a better alternative."
Gorgon LNG, which has seen a 40 percent cost hike, has about
65 percent of its LNG sold under long-term contracts, short of
the 80 to 90 percent that LNG producers typically aim to have
sold under long-term contracts.
"The closer we get to first LNG, the more valuable the
volumes are going to be, so we're confident that we'll be able
to market those incremental volumes," Krzywosinski said.