In a statement today Origin said there were a number of issues Worksafe Victoria had identified “resolution of which will significantly slow the progress of work at the plant.”
It said the project was unlikely to make a significant contribution to the financial results of the projects’ partners this financial year.
“At this point the duration of the delays associated with addressing these issues and subsequently completing the construction and commissioning activities at the Lang Lang plant cannot be easily quantified. Once these have been determined a new forecast for completion of the project and the delivery of first sales gas will be provided.”
This latest development calls into question Origin and partners’ approach to the project, it being Origin’s maiden offshore project. It has had a bitter and public falling out with the contractor Clough which it ran off the project.
Reportedly obsolete well tests failed to initially pick up mercury levels in the gas stream meaning processing equipment has had to be modified after installation, leading to blown out construction budgets.
The dispute between Clough and Origin is being negotiated. Investor relations manager Angus Guthrie told EnergyReview.net today that the project had identified some internal issues Origin needed to deal with. He said the recent restructure which put Karen Moses into the chief operating officer’s chair and Andrew Stock into Major Projects management would go a long way to addressing those inadequacies.
“It is fair to say Origin underestimated the complexities of the project when took over after Clough,” he said.
It is also worth noting that Origin’s upstream exploration division was the operator of the only two Australian wells in decades which experienced uncontrolled blowouts - Tarantula-1 and Myall Creek-8, the latter resulting in the death of a worker.
Guthrie accepted that with the recent Worksafe notices, Origin had not had a good safety record in recent years. “Obviously safety is an important issue for us, which is why we have put additional resources into it.”
Participants are Origin Energy Resources Limited* 37.5% (Operator), AWE Petroleum Pty Ltd 30.0%, CalEnergy Gas (Australia) Limited 20.0% and Wandoo Petroleum Pty Ltd 12.5%.
