Ichthys LNG loses 800 workers

Australia

DARWIN, March 16, 2017 – A leading contractor on Inpex’s flagship venture in Australia, Ichthys LNG, has laid off some 800 workers, the firm Laing O’Rourke said on Wednesday.

As a result of a financial dispute between Laing O’Rourke and fellow subcontractor Kawasaki Heavy Industries (KHI), work on a key part of the USD 34-billion venture, the construction of four cryogenic tanks in Darwin, was temporarily halted.

“KHI, which leads this phase, has not paid Laing O’Rourke for its work on this complex and resource-intensive remote engineering project for several months,” the firm said in a statement.

Australian media reports suggested that the total amount of the debts was around AUD 170 million (USD 129 million).

“Laing O’Rourke has made significant efforts to resolve the matter, but direct approaches to KHI in Japan over recent weeks have failed to produce a satisfactory outcome.”

This is the second contract dispute to plague Ichthys in recent months, after Cimic Group walked out of a power plant project in January, laying off 300 people.

Nevertheless, Inpex told reporters that the cryogenic tanks were about 90% complete, with Ichthys on track to start shipping LNG in Q3. Laing O’Rourke added in its statement that another one of its projects on site was unaffected by the dispute with KHI.

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