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Petrofac posts further losses

A recent photo of the almost completed Shetland Gas Plant - Photo: Total

OIL SERVICES company Petrofac has reported further losses of £30 million in the year to date on its much delayed Shetland Gas Plant project.

These losses are in addition to the £140 million ($220 million) reported earlier this year.

In its half yearly results reported to the London Stock Exchange on Tuesday the company said that first gas from the £3.3 billion Laggan-Tormore development was now expected in the last quarter of this year.

“On Laggan-Tormore, commissioning is well underway, with major systems handed over to the client; first gas is now expected in Q4 2015 with additional costs recognised of around £30 million in relation to final completion, pre-commissioning and commissioning activities,” Petrofac said.

The plant was originally scheduled to be completed in summer 2014.

After accepting the blame for underestimating the complexity of the project, including delays caused by the weather, Petrofac and Total negotiated a new completion date of 31 July 2015.

Despite not completing the plant on time again, Petrofac is hopeful that it can avert damage claims from client Total by successfully commissioning the gas plant over coming months.

“The Group is working in collaboration with Total as we commission the plant and we currently anticipate completion in the fourth quarter of 2015.

“Management believes that liquidated damages are not likely to be claimed in the event that our revised completion schedule is achieved and the gas plant is successfully handed over in line with our client’s expectation.

“Further delays to completion of the contract would increase the risk of a claim arising,” the company said.