More bad news could be on the cards for Chevron’s Gorgon gas project. The company yesterday announced that costs at the massive liquefied natural gas venture in north Western Australia have blown out by $9 billion due to soaring wage bills, logistics issues and bad weather.
A respected UBS economist has tipped a rise in growth and a return to commodities-intensive infrastructure investment in China next year. Wang Tao, the head of China economic research at UBS, yesterday predicted China’s economic growth rate to climb from the 7.6 per cent recorded this year to 8 per cent next year. Dr Wang said the rebound would be driven by the two key areas that helped fuel China’s stunning economic growth of the past decade, namely investment in infrastructure and property.”I think we all understand that China is not heading for a hard landing,” Dr Wang said.
Julia Gillard has backed-down on a push to streamline green-tape. The impasse stunned and frustrated business who had expected resolution since Prime Minister Julia Gillard’s commitment to reduce federal-state duplication of environmental approvals on major projects.
Chevron could be forced to deliver more bad news about its Gorgon gas project after yesterday’s announcement that the company’s Gorgon LNG project have blown out by $9 billion. The overruns come amid growing warning from business leaders in the local energy sector that Australia is becoming very uncompetitive at a time when competition in the world’s gas supply is increasing.
The US Department of Energy has released a report showing the viability of US shale gas for export, directly threatening Australia’s LNG projects by undermining the prices they fetch in Asian markets.
Glenda Korporaal writes that the Chevron cost blow-out confirms the warnings of other resource companies about the rising cost of doing business in Australia.
Chevron Australia boss Roy Kryzywosinski slammed Australia’s workplace relations regime, regulatory inefficiencies, layers of federal-state duplication and the cost impact of Australia’s carbon tax.
The Australian Financial Review
Big business accused the federal government of backflipping on its promises to reduce green tape regulations for multi-billion resource projects after the states failed to agree on a nationally consistent approach.
Jennifer Hewitt comments on COAG’s failure to end the green tape impasse.
Doubts are emerging about whether the Gillard government will accept foreign guest workers on big resource projects under EMAs before next year’s election.
United States exports of liquefied natural gas that could compete with Australian gas suppliers to Asia are a step closer, after a report finding favourable economic effects in all scenarios.
The West Australian
Nationals Leader Brendon Grylls has described the Pilbara as a “basket case” because of government failures to plan for its growth, leaving its 50,000 residents to live with a raw deal. Mr Grylls, the Regional Development Minister who hopes to become the member for Pilbara at the March 9 State election after switching seats from Central Wheatbelt, told a meeting of local government representatives and senior public servants yesterday that the region’s residents were being reduced to tears by high rents and inadequate services.
Chevron has cemented Australia’s position as one of the world’s most expensive places to do business, bringing the total overruns on Australia’s recently completed and under construction LNG ventures to $39.5 billion. [Not online]