UGH!
HOUSTON, Feb. 13, 2019 /PRNewswire/ -- McDermott International, Inc. (NYSE: MDR) today commented on its assessment of the financial position of the Cameron LNG project as of the end of the fourth quarter of 2018.
McDermott's comment follows the release on February 13, 2019, of quarterly financial results by Chiyoda Corporation, a member of the joint venture, along with McDermott, working on the project. For the fourth quarter of 2018, McDermott expects to report an adverse change in estimate of approximately $168 million, due to unfavorable labor productivity, and increases in subcontract, commissioning and construction management costs. The change in estimate is expected to impact McDermott's statements of operations for the three months and year ended December 31, 2018. McDermott and Chiyoda are executing the project under a 50-50 joint venture arrangement and are fully aligned at the joint-venture level regarding the change in estimate.
The Cameron LNG project, currently under construction in Hackberry, Louisiana, is a world-scale facility incorporating proven technology designed to produce nearly 14 million tons per year of liquefied natural gas. Operationally, the project is on track to reach a major milestone with feed gas into the facility later this quarter. Construction continues to progress well. The gas turbine solo run was completed ahead of schedule, cold circulation of hot oil in Train 1 was completed during the quarter and flare ignition testing was successfully completed on all flares. All of these are crucial steps in the commissioning of Train 1.
McDermott expects to report its results for the fourth quarter of 2018 on February 25, 2019.
You can lead a horse to water. But you can't make him get down on one knee and do an Al Jolson impression!
