Image courtesy of Chevron/Facebook.

An Australian construction firm has reportedly filed a billion lawsuit against Chevron for a cost dispute tied to the Gorgon LNG project.

CIMIC Group told Reuters on Monday that it has begun court proceedings in the United States to seek up to $1.42 billion from Chevron and KBR Inc., the project manager at Gorgon.

Further details about the proceedings have not been disclosed.

The dispute concerns a jetty that CIMIC was commissioned to build at the Gorgon LNG project in Western Australia in 2009.

CIMIC built the jetty as part of a consortium with Italy’s Saipem.

According to Business News Western Australia, CIMIC claims that Chevron and KRG altered the scope of the work and conditions for the jetty project, forcing the construction consortium to conduct extra fabrication and transportation work.

CIMIC also claims that the contractors had to provide additional resources to complete the project due to weather-related challenges, Business News added.

The jetty project was completed in 2014.

According to Reuters, CIMIC issued a notice of dispute for the construction work in February after the firms disagreed about changes to the project.

CIMIC added that negotiations under the contract are continuing.

“The commencement of the proceedings has no effect on the negotiation process or Cimic Group’s entitlement to the amounts under negotiation,” CIMIC told Energy Voice.

Chevron has not commented on the dispute.

Chevron started producing liquefied natural gas (LNG) and condensate at the Gorgon Project in March.

The Gorgon Project is supplied from the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 80 and 136 miles off the northwest coast of Western Australia.

The Gorgon field is one of the largest gas fields ever discovered in Australia.


  1. CIMIC Group had their priced bid based on initial scope of work and specifications from Chevron. After the commencement of work, Chevron (the company) has changed scope of work, specifications and requirements which i.e. Variation order or change order to the contractor (CIMIC) that will make the contractor change his cost evaluation. It is a straight forward EPC project procedure. Hence, CIMIC will win the case in court and another $1.42bn plus $ 500m of interest will add up to the overrun cost of this troubled project.
    Chevron had suffered huge cost overrun in all LNG projects around the word in the last decay and scored a historical failure in its Soyo and Gorgon LNG project which made the executive vice president of technology & projects Mr. Joseph Geagea to declare the company design defects in its LNG projects when he said ” We’re going to focus on design and engineering. We’re going to ensure those designs”.
    So, this is the problem that made chevron suffers in the last decay and what is been said by Mr. Geagea could be used in court in favor of CIMIC in their claim against chevron as it is a declaration from the company of its design defect.

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