A significant portion of the global economy is dedicated to megaprojects, with an estimated annual spending of $6-8 trillion. Unfortunately, these large-scale endeavors often experience delays and cost overruns, with less than 3% meeting budget and timeline expectations. Examples include the Kashagan Oil Field in Kazakhstan and the Gorgon LNG project in Australia.
The Kashagan Oil Field initially estimated at $10 billion ended up costing $55 billion due to delays and technical issues. Despite the challenges, it is a major contributor to global oil supply and Kazakhstan’s economy, accounting for a significant portion of the country’s oil output and revenue.
The Gorgon LNG project in Australia, initially costing $37 billion, incurred cost overruns to $54 billion due to logistical challenges. Despite delays, it remains a crucial player in the Asian LNG trade, providing a substantial supply to the Asia-Pacific region.
The TAPI Pipeline, a $10 billion project to transport natural gas from Turkmenistan to Afghanistan, Pakistan, and India, has faced security concerns and delays. The pipeline aims to address energy needs in the region and enhance Central Asia’s energy landscape.
The Trans Mountain Expansion in Canada, with a cost of $34 billion, aims to triple crude flow to Canada’s Pacific coast, providing access to Asian markets. The project has faced massive cost overruns but is seen as vital for Canadian energy exports.
The Mingyang Qingzhou 4 offshore wind farm project in China utilizes floating wind turbine technology to harness wind energy. Despite facing cost overruns, it is the largest floating wind power platform globally, generating enough electricity to power thousands of homes.
The Ichthys LNG project in Australia, initially estimated at $20 billion, ultimately cost $45 billion due to complexity and lead time. This crucial project supplies LNG, condensate, and LPG to Japan, accounting for a significant portion of the country’s annual LNG imports.
Read more at Yahoo Finance: 6 Energy Megaprojects That Blew Past Their Budgets