Chevron's Gorgon LNG project finally started up off Western Australia on Mar. 8. The gargantuan development will help hoist Australian LNG capacity to over 50 million tons this year and, along with other new schemes, allow Australia to overtake Qatar as the world's biggest LNG exporter later this decade. But at $54 billion, Gorgon is the world's most expensive liquefaction project and its maiden cargo, expected next week, will sail off into the stormiest market seas in years. Construction of the 15.6 million ton per year plant, which began more than six years ago, epitomized the problems facing all LNG mega-projects. Plagued by labor disputes and technical challenges, it suffered a 46% budget blowout and came on line more than a year late into a market in which spot LNG prices are at record lows (p9). Only one of its three trains has been completed, and the question for operator Chevron is how quickly the others will start. The second and third trains are scheduled to come on line at six- to nine-month intervals. But amid the LNG market glut, Chevron has not contracted all the output and some suggest the later trains could be delayed.
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