London-listed contractor Cape will have to swallow a £14 million ($21.9 million) charge due to rising costs at Algeria’s Arzew LNG project.
The company said an audit review in mid-May revealed additional costs that are “currently projected to produce a significant loss” on its work.
Cape has a sub-contract to provide insulation for state company Sonatrach’s GL3-Z LNG project, where lead contractors Snamprogetti and Chiyoda are building a new train.
“Based on the results of a review in February 2012… the timing of the work releases on the Arzew project had been slower than expected with revenues in 2011 less than one-third of planned levels,” said Cape.
The mechanical completion date of the contract remains unchanged and has forced Cape to “significantly increase” its...
