South African engineering player Murray & Roberts has nearly doubled the financial hit it is expecting to absorb from its work on the Gorgon LNG project, revealing nearly $63 million in additional costs to complete a marine project which is three months behind schedule.
Murray & Roberts revealed the additional 520 million rand cost in an updated trading statement on Friday evening Western Australia time, adding to a previous 580 million rand that it recognised as a loss on the project for the past financial year.
The Johannesburg-listed contractor, which owns 60 per cent of Perth-based Clough, confirmed the Gorgon Pioneer Materials Offloading Facility project it was undertaking was experiencing program delays.
“Piling works are progressing slower than planned as a consequence of adverse weather, productivity and geological issues,” the company told the Johannesburg Stock Exchange.
“The project is envisaged to be completed towards the end of the third quarter of the financial year, about three months later than previously expected.
“The current forecast loss at completion has increased by an estimated R520 million, which is over and above the loss accounted for at the end of the previous financial year.
“A geotechnical analysis is underway to establish the extent of the geological issues. The outcome of this analysis is important to determine whether the additional costs are recoverable.”
