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Contractor Takes Loss on Texas Petrochemical Project

An executive for Fluor Corp., an engineering and construction contractor, said on a recent conference call that the company is “extremely disappointed” by a $154 million charge on a petrochemical expansion project for Chevron Phillips.

An executive for Fluor Corp., an engineering and construction contractor, said on a recent conference call that the company is “extremely disappointed” by a $154 million charge on a petrochemical expansion project for Chevron Phillips.

According to a report in C&EN, the company blamed bad weather in the spring, saying that flooding conditions had disrupted employee productivity and led to an out-of-sequence work schedule. The company’s CEO also cited “piping performance” during the construction process.

Chevron has reported that the cracker is likely to run 5-10 percent over budget next year. Because the contract for the ethane cracker was set at a fixed price, Fluor has to pay for cost overruns.

One worker for Fluor also died in May in after an on-site accident.

Fluor’s construction work for Chevron is a joint project with Japan-based JGC and is now more than 80 percent complete. Once finished, Chevron will have an ethane cracker the size of 44 football fields that will turn a component of natural gas into 1.5 million metric tons/year of ethylene, a building block for plastic.

The plant is slated to open in 2017.

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