07/01/2009 - 11:08

Clough shares jump on Reindeer hopes

07/01/2009 - 11:08

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Shares in engineering and construction firm Clough have skyrocketed 60 per cent in trade today on hopes its previously terminated contract for work on the Reindeer gas field will be resurrected.

Clough shares jump on Reindeer hopes

Shares in engineering and construction firm Clough have skyrocketed 60 per cent in trade today on hopes its previously terminated contract for work on the Reindeer gas field will be resurrected.

Earlier today, joint venture partners Apache Energy and Santos announced it has signed a $US585 million ($A809 million) contract to supply gas from Reindeer to CITIC Pacific's Sino iron project in Western Australia.

News of the deal sent Clough shares up 15 cents or 60 per cent to an intraday high of 40c, before closing at 34.5c, up 9.5c or 38 per cent.

Last month, the JV partners deferred the development of Reindeer and the Devil Creek onshore gas plant on the back of adverse changes in the global economic outlook.

Santos had previously said the deferral will require the suspension or termination of certain engineering and construction contracts.

Clough's onshore and offshore construction contracts were terminated as a result, and the company confirmed today that this was the situation to date.

"Clough remains of the view that it is ideally placed to support Apache to realise the project given the substantial knowledge of the project and work already completed to date by Cough," the company said.

Perth-based mining services company Emerson Stewart Group is also involved in the Reindeer project in a managerial capacity, however the status of their contract is not known.

Emerson was not available for comment at time of publishing.

Shares in Emerson closed steady at 11c.

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