24/08/2011 - 09:41

Clough backer takes hit on Gorgon project

24/08/2011 - 09:41

Bookmark

Upgrade your subscription to use this feature.
Clough backer takes hit on Gorgon project

South African engineering player Murray & Roberts has quantified the financial hit it has taken from the Gorgon LNG project, revealing more than $77 million in costs to complete a marine project.

Murray & Roberts revealed the 580 million rand cost in an updated trading statement on Friday evening Western Australia time, the second biggest single item in a series of costs and charges amounting to 2 billion rand across its global operations.

The Johannesburg-listed contractor, which owns 60 per cent of Perth-based Clough, is not the only player affected by the cost of doing business in the Pilbara’s oil and gas projects.

Sydney-based diversified industrial services company UGL has reported that Woodside’s Pluto gas project was “impacting year-on-year EBIT (earnings before interest and tax)”, but did not provide details.

Revealing a solid rise in annual profit, UGL said the only weak spot was its resources division. UGL is a major contractor on the giant gas project, which has been hit by rising costs and delays as it moves closer to completion.

While Murray & Roberts did not give any further details in its recent announcement, it recently told the market that one of the primary factors influencing the group’s latest 12-month performance was losses recognised on the Gorgon Pioneer Materials Offloading Facility, which has experienced scope changes, delayed access and weather delays.

Murray & Roberts’ marine unit had a contract to design and construct the material-offloading facility for the Gorgon Project. 

Murray & Roberts took over the contract for the wharf-loading facility after its Perth-based joint venture partner, Marine & Civil, went into administration last year.

Murray & Roberts is also linked to Gorgon through Clough, a key member of the Kellogg Joint Venture awarded the engineering, procurement and construction management (EPCM) contract for all downstream facilities on Gorgon.

Clough estimates its share of the EPCM contract is $540 million. In its May guidance, Clough stated its profit for 2010-11 would be lower than forecast but said this was a timing issue due to weather-related delays, which would be fully recoverable.

Earlier this month, Clough announced its joint venture with France’s DORIS had won a $250 million deal to provide support services for the Ichthys LNG project in the Browse Basin off the coast of WA.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options