Chevron Gas Project Hits Snag

Chevron Corp.’s proposed $8.2-billion Gorgon liquefied natural gas project in Australia should not be allowed to proceed because it could damage the fragile offshore environment, an Australian agency said Monday.

The project, in which Exxon Mobil Corp. and Royal Dutch Shell have stakes, is “environmentally unacceptable” in its present form, the Western Australian Environmental Protection Authority said on its website. The Western Australian government has the power to overrule the agency and allow the project to proceed.

The oil companies have agreed to supply gas from the project to customers in North America, Japan and India.

Chevron said Monday that it would continue to work toward getting environmental approval for project this year, the San Ramon, Calif.-based company said. Last month Chevron said the project probably would miss its scheduled 2010 start-up because of planning and approval delays.