PERTH, Feb 20 (Reuters) - There is no need to rush theexpansion of the $52-billion Gorgon liquefied natural gas (LNG)complex, the chairman of Shell Australia said onWednesday, adding that the company wanted to avoid distractionwhile it kept the project on track.
Shell holds a stake of 25 percent in the Gorgon development,located off the coast of northwest Australia and spearheaded byChevron. Now 55 percent complete, it will be Australia'slargest, with an output of 15.6 million tonnes per annum (mtpa).
The joint venture expects to make a final investmentdecision on an expansion to 20.6 mtpa this year.
"Gorgon is just one tough massive project ... we want tomake sure that it stays on track and we don't want anydistractions," Ann Pickard, told reporters at an industryconference in Perth.
"I have no doubt that we will go to expansion on Gorgon, butI don't think there's any need to rush into it."
Gorgon, which also includes the world's largest carboncapture and storage project, saw a $15 billion cost increaselate last year, but Chevron still expects to have its first LNGshipments by 2015.
Chevron owns 47 percent of Gorgon, with Exxon and hShell holding 25 percent each, and the rest is shared byJapanese LNG buyers Osaka Gas, Tokyo Gas andChubu Electric.
Gorgon is just one of the roughly $190 billion worth of LNGprojects under construction in Australia, many of which havefaced cost blowouts due to the strength of the Australian dollarand inflated labour costs.
Cost increases have led some industry watchers to speculatethat majors such as Shell will slow investment in Australia infavour of more lucrative investments elsewhere, but Pickard saidAustralian developments would still be important.
"I think the world's going to be able to take all the gas wecan throw at it -- U.S., East African, Australian, Canadian -- Ithink the world can take it all," Pickard said.
FLOATING LNG TO SPEED UP TAX REVENUES
Floating LNG plants offer a lower-cost solution fordeveloping Australian gas, Pickard added.
"The lower the capex, the faster you are into a tax-payingposition," she said. "Floating is actually very good for thefederal government in terms of getting the tax revenues outfaster and quicker."
Shell is regarded as the frontrunner in developing floatingLNG platforms and expects to bring online by 2017 the world'sfirst floating LNG plant, Australia's Prelude LNG, which willgenerate A$12 billion in tax revenues.
Shell recently upped its stake in Woodside's Browse LNGdevelopment, a move that may signal the project will moveforward as a floating LNG plant rather than a land-based plant,according to industry insiders and analysts.
Woodside now faces a mid-2013 deadline to decide ifit will move forward with building an onshore LNG plant at JamesPrice Point in northwestern Australia.
The James Price Point location has drawn criticism fromgroups who say it will cause damage to Aboriginal sites and tothe environment, and some industry analysts say building anonshore plant may be uneconomic.
