Soaring gas demand and rising prices have led
But Chevron is already involved in a separate LNG venture with
Roy Krzywosinski, the managing director of Chevron Australia, said the firm is committed to both projects, but Wall Street Access analyst Bernard Picchi isn’t so sure. In fact, Picchi sees Chevron’s development of Wheatstone as a “big blow” for Gorgon.
Picchi said the development of Gorgon has faced a slew of problems–from significant development costs to how to clean the high levels of carbon dioxide from the field. Originally, Picchi said, development costs were estimated at $5 billion. Now estimates range between $20 and $25 billion. He said that while Chevron has tried to justify the low rate of return, Exxon is very unhappy and has held off the development of Gorgon. There has also been persistent speculation of dissent among the joint venture partners as costs continue to rise.
Chevron’s move is also bad news for
Meanwhile, Chevron announced on Monday that it plans to begin construction of a $3.1 billion natural gas project in the Gulf of Thailand. The Platong Gas II development is designed to boost natural gas processing capacity by 420 million cubic feet per day, Chevron said. The company said the project has the capacity to meet 14% of Thailand's demand for natural gas.
Chevron holds a 69.8% stake in the project. Mitsui Oil Exploration owns 27.4% and PTT Exploration and Production Public holds 2.8%. Startup is scheduled for the first quarter of 2011. Chevron's shares rose 0.6%, or 53 cents, to $85.79 in afternoon trading.