Shares in Forge Group have surged as much as 59 per cent as the company secures $97 million worth of contracts, including work on the Pluto liquefied natural gas project and the Dampier to Bunbury pipeline.
Shares in Forge Group have surged as much as 59 per cent as the company secures $97 million worth of contracts, including work on the Pluto liquefied natural gas project and the Dampier to Bunbury pipeline.
The company secured the contracts through its wholly-owned subsidiaries Cimeco Pty Ltd and Webb Construction (West Africa).
Cimeco will start work this month of the stage 5B expansion project for the Dampier to Bunbury pipeline, with the 14 month contract valued at around $50 million.
Meantime Forge will design and construct buildings and related facilities for the Pluto LNG project, with the 16 month contract valued at around $32 million.
Forge has also secured a $15 million, 9-month contract for the construction of leach tanks and associated work for Chirano Gold Mines' operation in Ghana.
Shares in Forge jumped 10 cents to a high of 27c before easing to 22.5c at 13:20 AEDT.
The announcement is below:
The Company is pleased to advise of the award of contracts with a combined value of approximately $100m to its wholly owned subsidiaries Cimeco Pty Ltd and Webb Construction (West Africa) Ltd. This is in addition to the award of contracts totaling $50m to our engineering and construction divisions, announced in September 2008.
The award of the three contracts listed below is of particular importance given the size, nature of work and profile of the projects.
a) Dampier to Bunbury Pipeline Upgrade
i. Client - DBNGP WA Pipeline Trust and DBNGP (WA) Transmission Pty Ltd.
ii. Project Manager - Westnet Energy
iii. Profile - The Dampier to Bunbury Natural Gas Pipeline (DBNGP) is Western Australia's most critical piece of infrastructure, transporting natural gas from the Pilbara region in the north to the south-west of Western Australia. The pipeline ensures that homes, businesses and industry have access to a reliable source of natural gas to fuel their energy needs. Natural gas from the DBNGP also fuels a large proportion of the state's electricity supply.
iv. Scope of Work - Cimeco has been engaged to undertake part of the Stage 5B Expansion Project for facilities upgrade at nine of the ten compressors stations running from Dampier to Bunbury. Cimeco's scope includes supply and installation of mechanical, electrical and instrumentation work associated with the provision of additional power generation, inlet scrubbers, buildings and a compressor unit. Cimeco has already commenced under a separate
contract with the client all the civil, earthworks and additional site facilities associated with the project.
v. Contract commencement - February 2009
vi. Contract completion - April 2010
vii. Contracts value - for both the civil and mechanical packages - approximately $50m
b) Pluto LNG Project - Burrup Materials Facility Stage 2
i. Client - Woodside
ii. Project Manager - Woodside
iii. Profile - The Pluto gas field was discovered in April 2005 in the Carnarvon Basin, located approximately 190km north-west of Karratha. Stage 1 work is already underway by other contractors, and includes dredging, land reclamation, seawall and wharf construction, and external services.
iv. Scope of Work - Design and Construct contract for civil and structural works for buildings and related facilities. Buildings include an Administration Office, Rigging Store, Chemical Store, Warehouse and Warehouse Office, Laboratory, and an optional Rotor Store. Ancillary works include laydown areas, and site services including potable water, electrical power and telecommunications.
v. Contract commencement - February 2009 (design); April 2009 (site).
vi. Expected contract completion - June 2010.
vii. Contract value - approximately $32m
c) Chirano Gold Mine Expansion
i. Client - Chirano Gold Mines Ltd (CGML)
ii. Project Manager - Lycopodium Engineering Qld Pty Ltd and JIP Engineering & Management Services
iii. Profile - CGML commissioned the original 1.85 MTPA CIL processing plant at Chirano in Ghana West Africa in 2005, for which Cimeco completed the scope of Tanks, and Structural, Mechanical and Piping Works. The plant is being upgraded to accommodate a throughput of 3.5 MTPA.
iv. Scope of Work - Cimeco has been awarded the contracts for construction of additional CIL Tanks, a Leach Tank, and the Structural, Mechanical and Piping Works associated with the expansion. In addition, CGML has commissioned JIP to design and construct a secondary and tertiary crushing circuit to augment the existing crushing facility. Cimeco has been awarded a subcontract by JIP for the civil and concrete works, and erection of structural and mechanical works associated with the extension to the crushing circuit.
v. Contract commencement - January 2009
vi. Contract completion - September 2009
vii. Contracts value - approximately $15m
Forge's forward order book continues to, at a minimum, support previously announced earnings and revenue guidance for the year ended June 2009. Furthermore, given the contract completion dates of the Pipeline and Pluto projects above, Forge remains confident of entering the 2009/10 financial year with a strong order base that will underwrite future earnings and revenue.
Importantly, Forge believes that its business model whereby the wholly owned construction subsidiaries of Cimeco Pty Ltd and Webb Construction (West Africa) Ltd provide diversified construction services for the resource industry is the right model for times when clients are looking for a "one stop shop" to minimise project costs.
