PETROFAC is set to record a further £70 million losses on the contract to build the Laggan Tomore gas terminal for Total on Shetland, where the company said it was plagued by low productivity and bad weather. Petrofac said it will recognise a £70m charge mainly in respect of liquidated damages after reaching a final settlement with Total regarding the contract to build the plant, which processes gas from the Laggan Tormore development West of Shetland. “Whilst it is clearly disappointing that a portion of Liquidated Damages has been applied, Petrofac is nevertheless satisfied that this brings to an end the project,” said the company. Petrofac has already recorded losses of around $610m (£420m) on the contract to build the terminal, which started operations in February around 18 months behind the original schedule. Petrofac’s chief executive Ayman Asfari has said the Jersey-incorporated company paid dearly for its lack of experience of running such a project in a wholly new geography.
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