Shell says no need to rush Australia Gorgon LNG expansion

2013-02-23 12:54 by Anja Reitz

Shell holds a stake of 25 percent in the Gorgon development, located off the coast of northwest Australia and spearheaded by Chevron. Now 55 percent complete, it will be Australia's largest, with an output of 15.6 million tonnes per annum (mtpa).

The joint venture expects to make a final investment decision on an expansion to 20.6 mtpa this year.

"Gorgon is just one tough massive project ... we want to make sure that it stays on track and we don't want any distractions," Ann Pickard, told reporters at an industry conference in Perth.

"I have no doubt that we will go to expansion on Gorgon, but I don't think there's any need to rush into it."

Gorgon, which also includes the world's largest carbon capture and storage project, saw a $15 billion cost increase late last year, but Chevron still expects to have its first LNG shipments by 2015.

Chevron owns 47 percent of Gorgon, with Exxon and h Shell holding 25 percent each, and the rest is shared by Japanese LNG buyers Osaka Gas, Tokyo Gas and Chubu Electric.

Gorgon is just one of the roughly $190 billion worth of LNG projects under construction in Australia, many of which have faced cost blowouts due to the strength of the Australian dollar and inflated labour costs.

Cost increases have led some industry watchers to speculate that majors such as Shell will slow investment in Australia in favour of more lucrative investments elsewhere, but Pickard said Australian developments would still be important.


Source: REUTERS - Wed Feb 20, 2013 3:27pm EST

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