CIMIC confirms dispute with Chevron over Gorgon jetty contract

CIMIC, former Leighton Holdings confirmed on Monday that a notice of dispute has been issued to Chevron over the Gorgon LNG jetty and marine structures contract.

In a filing to the Australian Stock Exchange, CIMIC said the negotiations between the consortium comprising its unit CPB Contractors and Saipem continue. CIMIC said that a notice of dispute over a blowout on the construction of the Gorgon LNG project’s jetty has been issued on February 9.

The contractor revealed that its share in the consortium’s total amount under negotiation equals approximately A$1.86 billion. With interest currently exceeding $500 million and continuing to accrue, the total amount could go well above $2 billion, according to CIMIC.

In November 2009, the consortium was revealed as the preferred contractor to construct the 2.1 kilometre Chevron Gorgon LNG jetty and marine structures project on Barrow Island, 70 kilometres off the Pilbara coast of Western Australia.

The scope of work consisted of the design, material supply, fabrication, construction and commissioning of the LNG Jetty. The scope also included supply, fabrication and construction of marine structures including a heavy lift facility, tug pens and navigation aids.

However, during the project which was completed in 2014, changes to scope and conditions led to the consortium submitting change order requests, CIMIC said.

CIMIC’s notice issued to Chevron calls for “further prescribed negotiations”, which could lead to private arbitration in case negotiations don’t succeed.

1 Australian dollar = 0.71775 U.S. dollars

LNG World News Staff