Chevron calls end of LNG mega project after $88 billion spree

Bloomberg

Chevron Corp. has signaled the end of major new LNG projects in Western Australia and is unlikely to sanction an expansion of its Gorgon and Wheatstone export developments as it focuses on boosting returns from $88 billion of investment.
The climate for developing large greenfield LNG projects has shifted to smaller developments given a slump in the price of oil to under $50 a barrel, according to Nigel Hearne, a managing director with the company’s Australia unit.
“The mega projects of the past decade are giving way to smaller, more targeted investments
with quicker economic returns,” Hearne said in a speech in Perth on Tuesday. “As it stands there is unlikely to be another large greenfield LNG development” in Western Australia.
Chevron’s two major Australian LNG facilities have suffered from cost blowouts, delays and poor timing. Oil’s worst slump in a generation and an LNG supply glut reduced revenue from projects across the industry.
While the third LNG train from the $54 billion Gorgon project is in the process of starting up, further expansions are unlikely in the current climate with Chevron focusing future investments on “shorter-term” returns.
“I can’t see in the near-term us investing in a fourth train at Gorgon or a third train at Wheatstone,” Hearne said in Perth. Chevron is focused on generating returns on its existing investments and paying a “dividend back for the money”
already spent.