The shifting energy market prompted state-owned Danish energy giant DONG Energy to readjust North Sea project priorities in late March. DONG and its partner, Bayerngas Norway, terminated the EPC contract with Technip France and Daewoo Shipbuilding and Marine Engineering to develop the estimated $2.2-billion Hejre oil-and-gas platform in the North Sea off the coast of Denmark. But DONG also awarded ABB a $250-million contract to connect its North Sea wind farm to the U.K. power grid.
The energy firms say they no longer have confidence in the supplier consortium to deliver the Hejre platform and are holding the Technip-Daewoo group in material breach of its contract, estimated at $560 million by one South Korea publication. The consortium has not been able to meet platform design and construction within an acceptable cost and schedule timeframe, said Ulrik Frohike, a DONG spokesman, on April 4. “We’ve experienced engineering design errors leading to substantial rework and unprecedented weight growth of the topside,” he added.