Chevron's Gorgon blows out to $US54bn Chevron's Gorgon LNG plant, under construction on Barrow Island. Australia's largest gas project Gorgon has suffered a multi-billion dollar cost blow-out and delay, the latest in a string of industry overruns. The cost of energy giant Chevron's liquefied natural gas project has blown out from $US52 billion to $US54 billion ($A57.65 billion to $A59.87 billion). Also, the start-up date for first gas from the Western Australian project is now expected to be in mid-2015 instead of the first quarter. Despite those issues, the project's economics remained attractive, said Chevron vice-chairman George Kirkland. "We continue to make steady progress against key project milestones and are applying lessons learned to our Wheatstone development which is almost 25 per cent complete," he said. Approximately 75 per cent of our combined LNG offtake from the two projects is committed under firm, long-term sales and purchase agreements. The smaller but still large $A29 billion Wheatstone project in WA is also operated by Chevron. The two projects will produce 400,000 barrels a day at full capacity. Thursday's cost blow-out is not a surprise, with Chevron previously complaining about a regulatory environment that was leading to wage and other cost problems. It also follows a cost increase last December from $US37 billion to $US52 billion. LNG is tipped to replace iron ore as Australia's top earning export within two decades. However, the $A200 billion suite of seven LNG projects being built have been marred by regular cost blow-outs and delays, and the development of rival projects overseas in countries such as Canada. Maritime Union of Australia (MUA) WA state secretary Christy Cain said while Chevron had highlighted high labour costs as contributing to cost blowouts, improved management practices would lead to savings. "Instead of blaming workers for the cost blowouts on Gorgon, Chevron management should be taking a good look at themselves and their management practices," he said. Public debate should focus on the salaries and perks of Chevron's management.