Fluor, which is building Chevron Phillips’ 'U.S. Gulf Coast Petrochemicals Project' in a joint venture with Japan-based JGC, has recorded a US$154 mln impairment charge for the project in Q3. That is largely responsible for Fluor reporting a net profit of just US$5 mln for the quarter.
“We are very disappointed in the construction progress on a fixed-price Gulf Coast project that led to a significant charge this quarter,” said David Seaton, Fluor chairman and CEO, adding that he is “extremely disappointed” by the financial loss the company is taking on building the US$6 bln Chevron Phillips petrochemical expansion in Baytown. Seaton confirmed Fluor will take a net loss on the entirety of the project. He cited weather delays, which were caused by Houston-area flooding in the spring, as well as problems with “piping performance” during the construction process. There was also one fatality in May when a Fluor contractor died after an on-site accident. Last month, Chevron Phillips acknowledged some minor delays caused by weather and additional retraining needed for some craft workers.