Costs escalate at Laggan-Tormore gas terminal
Losses are mounting on construction of the new gas plant on the main Shetland island serving Total’s offshore Laggan-Tormore development.
ContractorPetrofac expects to complete the work this summer, but the schedule has been hit by a series of delays. These included bad weather and industrial action on Shetland during March, which have pushed back ramp-up a month behind original expectations.
The project is currently in the final commissioning phase. In a statement, Petrofac said that as activity levels have increased, significantly more man-hours will be needed to complete the project than anticipated.
This is due to a combination of low manpower productivity levels, a greater level of rectification and reinstatement work than expected, and the failure of a subcontractor to deliver in line with its agreed scope.
The extra man-hours and associated support costs will likely lead to a further pre-tax loss on the project of around $195 million this year, in addition to the $230-million loss agreed under asettlement with Total in 2014.