Devil Creek / Reindeer Project Deferred
8 December 2008
Clough Limited has today been informed that the Reindeer Project Joint Venture has decided to defer the development of the Reindeer Offshore Gas development and the onshore processing facilities to be located at Devil Creek in Western Australia.
We have been informed that the decision was made due to adverse changes in the global economic outlook that have impacted the proposed foundation gas customer.
Consequently Apache Energy Limited has elected to terminate for convenience the Clough contracts for EPC of the onshore Devil Creek gas plant and for the installation of the offshore Reindeer production facilities.
John Smith, Chief Executive Officer of Clough commented, “We will work with our customer Apache Energy to bring the work to an orderly halt in order to preserve the value of the investment made to date. Under our contracts all costs and commitments made will be fully reimbursed by Apache.”
“The residual value of the contracts at termination is $390m, which reduces the Clough work under contract to about $1.3bn. The 2008/09 effect on planned earnings will be offset by improvements in other projects in particular the unbudgeted repair work on Varanus Island.”
“We will redouble our efforts to secure replacement work for 2009/10.”
Ends
For further information, please contact:
John Smith, Chief Executive Officer +61 8 9281 9407
Gaye Gelok, Manager Communications & Marketing +61 8 9281 9451/0413 336 323
About Clough
Clough delivers an integrated Engineering, Procurement and Construction service to projects in the oil and gas, mineral and infrastructure sectors in Australia and across South East Asia. The Group’s services range from concept development through design, construction, installation, commissioning, operations and maintenance.
We employ about 5,000 skilled professional, technical and trades personnel from bases across Australia, Indonesia and Thailand and deploy a first class suite of integrated management systems. We are committed to the concept of zero harm and the wellbeing of our people and to the sustainability of the environment and communities in which we work.