Australian gas, power projects hit by collapse of contractor Clough

Major gas and power projects crucial to Australia's energy supply from 2023 onwards are facing delays following the collapse of engineering firm Clough on Monday.

Clough was placed into voluntary administration by its South African parent, Murray & Roberts Holdings MUR, after a deal to sell the business to Italian construction giant Webuild SpA WBD fell through.

Deloitte, appointed as voluntary administrator, said it would assess Clough's financial position over the next two to three days and begin an accelerated sale and recapitalisation process, aiming to get projects back on track.

It said the goal is to source "immediate interim funding to be able to continue work on as many projects as possible as quickly as possible".

Webuild and Clough are partners on the A$5 billion ($3.36 billion) expansion of the Australia's biggest hydropower scheme, Snowy 2.0, which is already facing a delay of nearly two years.

Clough is also handling construction of the A$768 million ($515 million) Waitsia Stage 2 gas project, owned by a unit of Japan's Mitsui & Co 8031 and Australia's Beach Energy BPT.

The Waitsia Stage 2 project was due to start producing gas for export through the North West Shelf liquefied natural gas (LNG) plant in late 2023. Mitsui said it was too early to say what impact Clough's collapse would have on that timing.

"Given that an administrator has only just been appointed for Clough, it would be premature to speculate on the precise impacts for the Waitsia Gas Project Stage 2," Mitsui said in a statement.

Clough is also the contractor on a key project needed to shore up Australia's power supply, the 320 megawatt (MW) Tallawarra B gas-fired power station owned by EnergyAustralia, a unit of Hong Kong's CLP Holdings 2.

An EnergyAustralia spokesperson said the company was working through the implications of Clough going into administration and would have further comment later on Tuesday. Tallawarra B was due to start operating in October 2023.

Another major project facing delays is a 900 kilometre power transmission line, EnergyConnect, owned by TransGrid, essential for hooking new solar and wind farms to the grid. The line from South Australia to New South Wales was due to be completed in July 2026.

TransGrid had no immediate comment on Clough's collapse.

($1 = 1.4901 Australian dollars)