Le­gal ac­tion pipe­line

Pilbara News - - News - Peter Wil­liams

■ En­gi­neer­ing com­pany Mon­adelp­hous is em­broiled in fresh le­gal ac­tion by su­ing the de­vel­op­ers of a Fortes­cue Me­tals Group gas pipe­line for at least $33 mil­lion over cost blowouts.

Mon­adelp­hous is claim­ing in a Supreme Court writ the 270km Pil­bara pipe­line was com­pleted about three months late be­cause of de­lays and dis­rup­tions blamed on its clients.

The com­pany in­stalled the struc­ture in 2014 and early 2015 from near Kar­ratha to Fortes­cue’s Solomon Hub un­der a $96 mil­lion con­tract with DPB De­vel­op­ment Group (DDG) and TEC Pil­bara.

It seek­ing about $19 mil­lion from DDG and $14 mil­lion from TEC Pil­bara — a unit of Cana­dian power gen­er­a­tor TransAlta — plus in­ter­est and costs.

DDG is a sub­sidiary of the ASXlisted DUET Group, which con­trols the Dampier to Bun­bury pipe­line.

The writ al­leges higher costs were in­curred be­cause of a late start, which up­set con­struc­tion plans and pushed the pro­ject into the Pil­bara’s dis­rup­tive sum­mer wet sea­son, and con­tract vari­a­tions re­quested by DDG.

The $183 mil­lion pipe­line en­abled Fortes­cue to lower its costs by switch­ing its TransAlta-op­er­ated power sta­tion at the Solomon op­er­a­tion from diesel to gas. An­drew For­rest-chaired Fortes­cue has a 20year, 100 per cent take-or-pay deal with the pipe­line de­vel­op­ers.

The writ says Mon­adelp­hous’ prac­ti­cal com­ple­tion of the pipe­line was achieved in March 2015 in­stead of De­cem­ber 2014 as agreed.

It ac­cuses DDG of not pro­vid­ing ad­e­quate ac­cess to the site un­til Novem­ber 2014, sev­eral months later than re­quired un­der the con­tract.

One of the rea­sons cited for the de­lays was con­struc­tion con­sent from the State Govern­ment be­ing ob­tained 24 days later than sched­uled.

Mon­adelp­hous and DDG clined to com­ment.

A Mon­adelp­hous joint ven­ture is in a $200 mil­lion dis­pute in Queens­land over blowouts at Gladstone’s Wig­gins Is­land coal ex­port ter­mi­nal.

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Pic­ture: DBNGP/Duet

Mon­adelp­hous is su­ing the de­vel­op­ers of a Fortes­cue River gas pipe­line over cost blowouts.

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