AMEC could be kicked off a pipeline deal on Humberside after gas transporter Transco issued the firm with an improvement notice for safety breaches two weeks ago.
Transco took action following a number of safety incidents on Amec's £15 million West Hull Reinforcement project, an 18 km-long pipeline from Wawne, north of Hull, to Elloughton.
In the most serious of the incidents, the contractor is understood to have struck overhead power lines during construction.
Amec has until next Monday to show Transco that it has improved standards on the job, or it faces losing the contract.
A Transco spokesman said: 'All of our contractors know that we have very exacting safety procedures, and we would not have taken a decision like this unless there had been a number of incidents where they have not been met.
'Terminating the contract would be the last resort but it is an option.'
An Amec spokesman said: 'This is the first time in 14 years that this has happened, but we have put in place training programmes and we are implementing a review of safety procedures to make sure we meet Transco's standards.'
If Transco drops Amec, it would be the first time it has kicked off a contractor since it removed a consortium of McNicholas Construction, Aarslef and Freytag from two pipeline contracts in October 2000.
Transco has also drafted in a new project team on Australian firm McConnell Dowell's 29 kmlong pipeline scheme from Salmesbury to Helmshore in Lancashire worth £15 million.
A Transco spokesman said: 'A number of engineering issues have come up. There are particularly poor ground conditions on the job and these have been made worse by the weather.
'The job is behind schedule at the moment but we are hopeful that it will still be commissioned next winter. The new team is more used to dealing with this sort of thing.'
Meanwhile, a Nacap/Lawrence joint venture is finally due to complete the Aberdeen to St Fergus pipeline project in Scotland after 15 km of the 70 km scheme was left outstanding last year because of problems obtaining compulsory purchase orders.
The Scottish Executive was due to hold a hearing on the scheme in February, but objectors dropped their complaints and Nacap/Lawrence resumed work in March.