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Leighton's Gorgon contract balloons

25th February 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) - Project house Leighton on Monday reported that its contract to deliver civils and underground works packages for the Gorgon liquefied natural gas (LNG) project had increased by $975-million, to an estimated value of $1.78-billion.

The company said that the new estimated value reflected an increased and amended scope of work to provide better flexibility to deliver the package in a more efficient and timely manner.

In December last year, energy major Chevron warned of a A$9-billion cost blow-out at the Gorgon LNG site, on Barrow Island, following a cost and schedule review.

Foundation costs increased from A$43-billion to A$52-billion, with Chevron blaming the increase on labour costs and productivity associated with Barrow Island site infrastructure, logistics challenges and weather delays.

Leighton’s contract scope at Gorgon includes earthworks, in-situ and precast concrete and underground services.

Plant start-up at Gorgon was planned for late 2014, leading to first LNG cargo in the first quarter of 2015.

Edited by Creamer Media Reporter

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