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Ichthys LNG project hit by contract dispute

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LNG Industry,

According to Reuters, INPEX’s Ichthys LNG project has been hit by another contract dispute, involving the termination of over 600 workers. Despite the dispute, the project is reportedly still on schedule to start-up in July – September 2017.

Saul Kavonic, a Perth-based analyst for Wood Mackenzie, reportedly said: “INPEX is targeting a very aggressive construction completion... to get a first cargo out by the end of September, given the central processing facility, the largest in the world, is still in a Korean shipyard.”

Members of the consortium responsible for constructing the project’s LNG storage tanks at the Ichthys onshore site (near Darwin, Australia) are reportedly in disagreement with one another, and have stopped working. JKC Australia, which is handling the project’s overall construction, reportedly said that dispute has led to one member immediately letting go 640 workers. Nevertheless, INPEX claims that the tank construction is still 91% complete, and that the project remains on schedule.

The disagreement is reportedly between two members of the consortium – Kawasaki Heavy Industries and Laing O’Rourke PLC – and regards a payment dispute. Laing O’Rourke claims that Kawasaki Heavy Industries has not paid its partner for works on the project for a number of months. JKC claims that Laing O’Rourke has consequently released approximately 245 local hires, as well as 395 additional workers that fly in and out.

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