The BassGas partners said this was a response to “…more construction defects and further increases in the cost of rectification.”

In January the Federal Court dismissed Clough Limit's application for restoration of the $19.3 million bond called by Origin Energy on behalf of the BassGas joint venture. It also refused to grant an injunction to restrain the calling of a second bank guarantee of a further $19.3 million.

But Clough still maintained it had fulfilled its obligations in the BassGas project.

On 16 December last year Clough submitted a certificate issued by Lloyds of London certifying the offshore facilities were contractually ready for start-up (RFSU) and implied that the delays had much to do with the mercury levels in the gas.

The following day, Origin ejected all Clough staff from the BassGas onshore and offshore worksites.

Origin said the Lloyds inspection did not cover all of the work required to be completed under the Contract to ensure that RFSU was achieved. It also maintained that Clough was misrepresenting the mercury issue.

After Clough was ejected from the project, Downer Engineering was appointed to complete the remaining rectification works and modify the offshore facilities and onshore processing plant to handle some impurities in the gas stream.

But since then Worksafe Victoria which has issued 'improvement notices' halting commissioning work on the onshore gas plant. Origin said it could not say now when the plant would be ready, but it would not be this financial year.

Origin Energy Resources Limited is the BassGas project operator (32.5%), in joint venture with AWE Petroleum Pty Ltd (30.0%), CalEnergy (Australia) Limited (20%), Wandoo Petroleum Pty Ltd (12.5%) and Origin Energy Northwest Limited (5%).