Costs escalate at Laggan-Tormore gas terminal

Offshore staff

LONDON – Losses are mounting on construction of the new gas plant on the main Shetland island serving Total’s offshore Laggan-Tormore development.

Contractor Petrofac 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 a settlement with Total in 2014.

04/20/2015

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