The Gorgon project in Australia will be even larger than expected, with Chevron Corporation (NYSE:CVX) adding additional capacity to this massive liquefied natural gas (LNG) project.

Discount Brokers Comparison: Your one-stop shop for finding the perfect broker for your investments.

Overview
The Greater Gorgon project is 47% owned and operated by Chevron, with ExxonMobil (NYSE:XOM) and Royal Dutch Shell (NYSE:RDS.A, RDS.B) each owning a 25% interest in this project. Osaka Gas, Tokyo Gas and Chubu Electric Company also own minor shares of Gorgon.

The Gorgon Project originally involved the development of the Gorgon and Jansz-Io natural gas fields located off the coast of northwest Australia. The natural gas will be transported to Barrow Island where Chevron and its partners planned to construct a three-train liquefied natural gas (LNG) facility with an annual capacity of 15 million tons.

Chevron will also build a natural gas processing facility here, with a capacity of 280 million cubic feet of natural gas per day. This output will be transported by pipeline to Australia for consumption by its domestic market. The company expects the project to cost between $37 billion and $43 billion and estimates that initial production from the Gorgon project will begin in 2014.

SEE: A Guide To Investing In Oil Markets

Expansion
Chevron now plans to add a fourth LNG train to the Gorgon Project, increasing its total capacity to 20 million tons per year. The company will develop the Geryon and Chandon fields to provide a supply of natural gas for this expansion. Chevron still needs to obtain regulatory approval for the fourth LNG train, which is expected to add an additional $10 billion to the cost of the Gorgon project.

Wheatstone
The Gorgon project is not the only LNG facility that Chevron is involved with in Australia. The company is also working on the Wheatstone LNG project, located in the same general area as Gorgon. Wheatstone involves the development of four offshore natural gas fields and the construction of a two-train LNG facility on the Australian mainland. The facility will have a capacity of 8.9 million tons per year and will also supply natural gas to the domestic market.

Wheatstone is operated and 72.14% owned by Chevron, with Royal Dutch Shell and Apache Corporation (NYSE:APA) having a 6.4% and 13% ownership interest in the project, respectively.

SEE: Oil And Gas Industry Primer

Other LNG Projects
Several LNG projects are under construction or being planned in the United States as the industry looks to deal with the oversupply of natural gas. Cheniere Energy (NYSE:LNG) and Cheniere Energy Partners, L.P. (NYSE:CQP) recently received final approval to build a four-train LNG export plant at an existing facility in Louisiana. The company initiated construction in August 2012 and expects this project to start up in 2015.

Sempra Energy (NYSE:SRE) also plans to build a LNG export facility in Louisiana and expects to start construction in 2013, with a planned start up in 2016. The Cameron LNG project will have a three-train liquefaction plant with an annual capacity of 12 million tons.

The Bottom Line
Chevron Corporation plans to add an additional LNG train to the Gorgon project in Australia and will also develop two additional offshore fields to supply natural gas to this project. This planned LNG facility and expansion is one of many that the company has under construction or in the planning stage.

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Stock Analysis

    Will Virtusa Corporation's Stock Keep Chugging in 2016? (VRTU)

    Read a thorough review and analysis of Virtusa Corporation's stock looking to project how well the stock is likely to perform for investors in 2016.
  2. Stock Analysis

    The Top 5 Platinum Penny Stocks for 2016 (PLG, XPL)

    Examine five penny stocks in the platinum mining business that investors may wish to consider adding to their investment portfolios for 2016.
  3. Stock Analysis

    Analyzing Porter's Five Forces on JPMorgan Chase (JPM)

    Examine the major money-center bank holding firm, JPMorgan Chase & Company, from the perspective of Porter's five forces model for industry analysis.
  4. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  5. Stock Analysis

    Analyzing Dish Network's Return on Equity (ROE) (DISH, TWC)

    Analyze Dish Network's return on equity (ROE), understand why it has vacillated so greatly in recent years and learn what factors are influencing it.
  6. Fundamental Analysis

    5 Must-Have Metrics For Value Investors

    Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know.
  7. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  8. Fundamental Analysis

    4 Predictions for Oil in 2016

    Learn four predictions for oil markets in 2016 including where prices are heading and the key fundamental factors driving the market.
  9. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  10. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center