CANBERRA: UK-based contractor Laing O’Rourke has become the second major contractor this year to quit a project to build a gargantuan liquid natural gas (LNG) processing facility in Darwin, Australia. Saying it had not been paid in months, the company announced last week that it had demobilised approximately 800 of its people from the US$34bn Ichthys scheme, being developed by a consortium led by Japanese oil and gas company Inpex. Laing O’Rourke has been constructing four cryogenic storage tanks on the project for Inpex’s lead contractor JKC Australia LNG under a contract signed in 2012. Work began on site mid-2013 and is in its final stages. The issue, however, is with with Kawasaki Heavy Industries (KHI) of Japan, which is leading this works package. KHI, Laing O’Rourke said, “has not paid Laing O’Rourke for its work on this complex and resource-intensive remote engineering project for several months”.
Direct approaches to KHI in Japan over recent weeks have “failed to produce a satisfactory outcome”, the contractor said. “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,” the contractor said, adding: “KHI has declined to take those necessary steps.” Laing O’Rourke said it would try to redeploy staff to the company’s “significant national pipeline of projects whilst also assisting sub-contractors impacted by this demobilisation”. The company’s other project on the Ichthys site, which is direct for JKC, is unaffected.
