Chevron looks to expand in Australia, Reuters and Bloomberg Report

The U.S.'s second largest oil company, Chevron Corp

, is planning to increase its investment in Australia by producing more liquefied natural gas (LNG) from its Gorgon and Wheatstone projects. Reuters(http://www.reuters.com/article/2013/05/28/chevron-australia-idUSL3N0E90GT20130528) reports that Chevron's A$52 billion Gorgon site is 60 percent complete. Chevron plans to start engineering and design work for expansion by the end of the year. Bloomberg (http://www.bloomberg.com/news/2013-05-28/chevron-plans-to-sell-more-gas-from-a-52-billion-gorgon-project.html) reports that executives from Chevron want to have about 85 percent of its share of LNG to come from the Gorgon site. Deals are already underway that link the Gorgon site to long-term contracts. The Gorgon investment project is Australia's most costly resource project in history. The cost of the project rose 21 percent this past year due to local currency gains and higher than expected labor expenses. Chevron's Managing Director in Australia, Roy Krzywosinski, expressed concerns over high cost impacts. He commented that, “Nothing is a slam dunk…the issue of cost structure is a significant issue, especially if you have an international portfolio of competing priorities.” James Paton of Bloomberg reports that the Gorgon project is expected to deliver its first liquefied natural gas cargoes between January and March of 2015. At full capacity the plant is expected to produce 15.6 million tonnes of LNG per year. Chevron's smaller plant Wheatstone is worth A$29 billion. This plant's capacity is expected to produce about 8.9 billion tonnes per year and is scheduled to ship in 2016. Chevron closed on Friday at $125.45