Waste contract lost
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.