Waste con­tract lost

Pilbara News - - News - Stu­art McKin­non

Toxfree has lost a big waste man­age­ment con­tract with Chevron on Bar­row Is­land for the com­pany’s Gor­gon liq­ue­fied nat­u­ral gas project.

Toxfree an­nounced last week its con­tract on the is­land with the US oil and gas giant would cease at the end of June.

It is not yet known to which com­pany the con­tract will go, but Toxfree said it had put in a very strong pro­posal to re­tain the work af­ter Chevron called for ten­ders last year.

Toxfree said it would con­tinue to pro­vide ser­vices to Chevron’s other Aus­tralian oper­a­tions un­der its Mas­ter Con­trac­tor Ser­vices Con­tract. The com­pany also noted its in­dus­trial ser­vices on the Wheat­stone LNG project with Bech­tel would not be af­fected by Chevron’s de­ci­sion.

“Toxfree can in­form share­hold­ers that Toxfree’s es­ti­mated con­tri­bu­tion from Bar­row Is­land ser­vices in fi­nan­cial year 2018, based on Toxfree’s as­sess­ment of the waste vol­umes, was ex­pected to be be­tween $1 mil­lion and $2 mil­lion in EBITDA (earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion),” the com­pany said in a state­ment.

How­ever, Toxfree said it was con­fi­dent of im­proved earn­ings in full-year 2018 re­gard­less of the Gor­gon con­tract be­cause it had re­cently won con­tracts with In­pex in Dar­win for its Ichthys LNG project, GLNG in the Surat Basin in Queens­land and an ex­panded scope of work for FMG’s waste ser­vices in the Pil­bara through an in­dige­nous joint ven­ture.

New technologies in waste treat­ment and an or­gan­i­sa­tional re­view of its busi­ness would also im­prove pro­duc­tiv­ity and re­duce costs, the com­pany said.

Toxfree ini­tially signed a $170 mil­lion five-year con­tract to pro­vide waste man­age­ment ser­vices for Chevron’s WA oper­a­tions in 2013. But it is un­der­stood to have re­viewed the con­tract as the project moved from construction into its op­er­a­tional phase and as the com­pany looked to cut costs.

Toxfree emerged from a trad­ing halt last week.

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