Gorgon meets the magic pudding

Not unexpected news today from Chevron which has announced that its monstrous Gorgon LNG project is another $2 billion over budget and will now cost $54 billion. It was originally budgeted at $37 billion.

It also pushed back its first gas timetable to mid 2015 from late 2014.

This is one reason why we’re seeing the mining capex cliff pushed out. The magnificently expensive seven LNG projects around the country are seeing such regular cost blowouts that it is continuously replenishing the capex pipeline even as it empties.

A uniquely Australian magic pudding!

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.