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Petrofac profits plummet after gas plant delay

The Shetland Gas Plant before the first gas was received in February. Photo: Total.

PETROFAC’s annual profits have slumped by over £300 million as a result of delays in setting up the Shetland Gas Plant, which opened earlier in February some 18 months behind schedule.

The company announced on Wednesday that it made a net profit of $9 million (£6.5 million) in 2015, which was down from $581 million (£418 million) the previous year.

If losses from the creation of the Shetland Gas Plant were not accounted for, Petrofac’s net profit would have been $440 million (£317 million).

Petrofac was the chief contractor for the £3.3 billion project, which opened at the start of February behind schedule and over budget.

The company’s group chief executive Ayman Asfari said its yearly results were directly affected by the project, which taps into the Laggan and Tormore fields west of Shetland.

“However, we faced up to the exceptional challenges we encountered and honoured our commitment to our client,” he said.

“With the plant now successfully operational, these issues are finally behind us.

“Petrofac’s core proposition is based on strong project execution, clear geographic focus, a disciplined approach to bidding and a sustainable, cost-effective structure.”

The flagship development, which French oil company Total has a 60 per cent stake in alongside DONG and SSE, is expected to play a significant role in the UK economy.