Monadelphous Secures Facilities Management Contract Extension for Australia's Large-Scale Gorgon Project

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The Gorgon Liquefied Natural Gas (LNG) project is being developed in a nature reserve on Barrow Island in Western Australia by Chevron Australia Pty Limited (NYSE:CVX) (Perth, Australia).

Chevron is working with the Kellogg Joint Venture Group (KJVG) (which consists of KBR, JGC, Hatch and Clough) and the Gorgon Upstream Joint Venture (which consists of J P Kenny and Technip Oceania) to develop the project. Both joint ventures are located in Perth, Australia. Once the project is operational, it will produce about 15 million metric tons of LNG per year, and it will have the possibility of a production expansion. The large-scale LNG project was given the development go-ahead in September 2009, and was initially forecasted to cost a total of approximately $38.8 billion (AUS$37 billion); however, there have been rising costs in Australia Chevron; and now industry leaders are conducting a cost review analysis, which is expected to be completed by the end of the year.

Monadelphous Group Limited (Perth, Australia) is a leading Australian engineering group that provides services to the resources, energy and infrastructure industry sectors. Monadelphous has just secured a one-year extension to a facilities management services contract that is valued at $135.7 million (AUS$130 million) for the operation and maintenance of construction facilities and utilities on Barrow Island. The contract involves the operation and maintenance of water and waste water treatment plants, power generation and distribution systems, and the management and maintenance of other buildings, vehicles and equipment.

The original contract was awarded in November 2009 for an initial three-year term. In 2009, the facilities management contract was valued at $62.7 million (AUS$60 million). In the last financial year, about 175 people were employed as a result of Chevrons long standing contract with Monadelphous.

Monadelphous was recently awarded with a similar contract for work on the operational Karatha LNG production plant, which is also located in Western Australia near Dampier.

The Gorgon project consists of three production trains. An output expansion has been proposed, which would increase production of each of the three trains from 5 million metric tons per year to 5.2 million metric tons per year.

Chevron and its joint venture partners will continue the construction of the LNG tanks on Barrow Island. Site preparation and work on the upstream facility and submarine pipelines continue. Hyundai Heavy Industries Corporation Limited (Ulsan, South Korea) has been conducted production module fabrication. These works continue within a set of complicated logistics of building such a large project on a nature reserve.

Industrial Info is currently tracking seven large-scale LNG production projects under construction in Australia that have a total investment value of more than $171.1 billion (AUS$164 billion). These projects, when in full operation, will increase Australia's LNG export capacity from about 24 million metric tons per year to more than 80 million metric tons per year.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.