Speaking to shareholders at the company's annual meeting, Clough chief executive David Singleton said the company would only just break even in the current year.

BassGas was the biggest and most complex project Clough had carried out in its own right and had been a technical success, according to Singleton.

“There has, however, been a much darker side of this project concerning our relationship with our client and its joint venture partners,” he said.

“The client has pursued what I consider to be a very aggressive contractual stance which will inevitably lead to a significant adversarial relationship.”

Singleton maintained that Clough had completed its obligations in the $400 million BassGas turnkey contract, but delays to Origin's drilling program and concerns about the composition of gas had affected costs.

The BassGas project was scheduled to be completed in early June. Singleton said Clough was ready to do tie-in work in August but Origin repeatedly rejected its plans to commission the facility.

In September it was revealed that gas from the Yolla-4 well contained unexpected mercury levels which the plant had not been built to handle, Singleton said. That same month Origin said it was seeking liquidated damages from Clough for each day the project was not ready to start.

“These client-based problems will undoubtedly affect Clough,” Singleton said.

“The contract structure gives us very little room for manoeuvre in the short term and we continue to have high fixed costs on the project.”

Interest in BassGas are Origin Energy (operator) 32.5%, AWE Petroleum 30%, CalEnergy (Australia) Ltd 20%, Wandoo Petroleum Pty Ltd 12.5%, and Origin Energy Northwest Ltd 5%.

“Origin and the joint venture have consistently refused to treat our cost issues seriously and have instead taken the tack of referring us to arbitration in respect of our claims,” Singleton said.

It could take years for the dispute to be resolved by legal arbitration but Clough was confident it would eventually recover the money, he said.

The cost blowouts on BassGas do not include the liquidated damages of $200,000 a day Origin is seeking from Clough. But Singleton said Clough would not pay any damages.

Meanwhile, Clough shareholders have voted overwhelmingly to back a deal that will see the Clough family cede control within four years to South African contracting group Murray & Roberts.

Murray & Roberts will buy 120 million shares at 68 cents each to lift its stake in Clough from 4.9%to 29.3%.

Half the increase will come from new shares, giving Clough a $40.1 million cash injection, and the other half from the Clough family's stake.

Murray & Roberts group chief executive Brian Bruce and corporate strategy director Norbert Jorek were also elected to the Clough board.

Bruce said Murray & Roberts became aware of the BassGas situation during its due diligence of Clough ahead of the transaction but believed it would be resolved in Clough's favour and was a working capital issue.

“This $20 million was there, we just saw the resolution process a little earlier than we see it at the present time,” Bruce said.

Clough fell 3 cents yesterday to 54 cents, down from 80 cents a year ago.