Laing O’Rourke has demobilised about 800 of its people from the $46 billion Ichthys liquefied natural gas (LNG) project near Darwin because of a pay dispute.
In partnership with Kawasaki Heavy Industries (KHI) of Japan, Laing O’Rourke has been contracted to construct four cryogenic tanks on the Inpex-led project for lead contractor JKC Australia LNG since 2012. Work on the contract started in mid-2013 and is in its final stages.
According to Laing O’Rourke, it has not been paid by KHI for its work “on this complex and resource-intensive remote engineering project for several months.”
“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,” Laing O’Rourke said in a statement.
“After the most recent meeting in Tokyo last Thursday, Laing O’Rourke notified the parties that it would take action to protect itself from the consequences of KHI’s conduct, unless urgent measures to rectify the situation occurred. KHI has declined to take those necessary steps.”
Laing O’Rourke will now attempt to redeploy staff to the company’s other projects in Australia, while also assisting sub-contractors impacted by the demobilisation.
The company added all staff, suppliers and contractors would receive their entitlements while the dispute was being resolved. Its other project at Ichthys has been unaffected by the dispute.
According to an ABC report, JKC said it expected the issue would be resolved, saying it was not in dispute with Laing O’Rourke or KHI.
In December 2016, JKC announced that 145 workers from contractor UGL were made redundant at Ichthys. It said this move “was a natural part of every construction cycle.”
The Ichthys project is a joint venture between Japan’s Inpex (76 per cent) and France’s Total (25 per cent).