LOS ANGELES, Dec 12 (Reuters) - Chevron Corp raisedthe cost of its giant Gorgon liquefied natural gas (LNG) projectin Australia by $2 billion on Wednesday, the second increase injust over a year to take the total cost to $54 billion.
The cost increase at Gorgon was part of a jump in Chevron'soverall investment spending to $42 billion this year, far morethan the $36.7 billion the company originally budgeted. Largerrival Exxon Mobil Corp's 2013 budget was $38 billion.
Gorgon is among around $190 billion worth of LNG projectsunder way in Australia which have suffered cost blowouts frommounting costs due to labour shortages and foreign exchangemovements.
"Gorgon project economics are attractive," Chevron ViceChairman George Kirkland said in a statement, adding that theproject is 75 percent complete and will start-up in mid-2015.
"We also anticipate 2014 will represent the peak year forspending on our Australian LNG projects as we move them closerto first production," Kirkland said.
Chevron, the second largest U.S. oil company, added $15billion to the Gorgon budget late last year.
Chevron owns 47 percent of Gorgon, while Exxon and RoyalDutch Shell Plc each hold 25 percent stakes and therest is shared by Japanese LNG buyers.
Investors are putting increased pressure on the world'sbiggest oil companies to rein in spending and return more moneyto shareholders - a trend Shell recently warned against becauseit may create oil shortages in the future.
Chevron's overall LNG production, including that fromanother Australian plant being built called Wheatstone and anewly opened development in Angola, is expected to double to theoil-equivalent of 460,000 barrels per day (boepd) in 2017.
That is a major part of the production Chevron plans to addas it pursues its 2017 production target of 3.3 million boepd,up from about 2.6 million currently.
In a statement, Chief Executive John Watson said 2013 wouldbe "a relative peak year for investments."
The company also plans to spend $39.8 billion on projectsand exploration in 2014, as it finishes work on hugedevelopments in Australia as well as the Gulf of Mexico.
Chevron has three projects in the works in the Gulf ofMexico: Jack/St Malo, Big Foot and Tubular Bells. The Jack/St.Malo project is scheduled to start next year, while the Big Footproject is forecast to start in the second quarter of 2015,Chevron said.
The San Ramon, California-based company also included in itslist of major projects the expansion of the Caspian Pipeline inKazakhstan and Russia and development of the Usan and Agbamideepwater fields in Nigeria, among others.
As for the "downstream" budget for refining and chemicals,Chevron set that at $3.1 billion, compared with a budget of $2.7billion this year.
