| SYDNEY/TOKYO, March 15
SYDNEY/TOKYO, March 15 Inpex's $37 billion
Ichthys Australian liquefied natural gas project was hit by
another subcontractor dispute, involving the termination of more
than 600 workers, but the Japanese company said it was still on
schedule for a July-September start.
Members of a consortium building LNG storage tanks at the
onshore site of Ichthys near Darwin are in dispute with each
other and have stopped work, with one of them abruptly letting
go 640 workers, said JKC Australia LNG, which is handling
overall construction of the project, on Wednesday.
Inpex said the tanks were 91 percent complete and the
project remained on schedule to start shipping LNG to customers
in the third quarter.
Still, the disagreement is the latest potential delay in
Australia's $200 billion LNG ramp-up, one of the biggest supply
increases ever in the gas industry and which will lift Australia
over Qatar as top global exporter of the fuel.
The Ichthys dispute is not good news for the project's
timely completion, said Saul Kavonic, a Perth-based analyst for
global resource consultancy Wood Mackenzie.
"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 ship yard," Kavonic said.
Inpex is not directly involved in the disagreement because
it's a matter between subcontractors, so it is not in a position
to comment, the Japanese company said.
The disagreement between consortium members Kawasaki Heavy
Industries and Laing O'Rourke PLC involves a payment
dispute, with JKC saying the latter has released about 245 local
hires and 395 other workers that fly in and out.
Ichthys was hit by an earlier contractual dispute in January
when an engineering company building a power plant for Ichthys
pulled out of the project.
The Australian Manufacturing Workers' Union in a statement
said the lay-offs were "due to an ongoing contractual dispute on
the project regarding payments."
Kawasaki Heavy has not paid its partner for work on the
project for several months, Laing O'Rourke said in a statement.
Kawasaki Heavy could not immediately comment.
Most of the LNG plants being built in Australia, including
Chevron's huge Gorgon facility and Royal Dutch Shell's
floating Prelude production vessel, are having trouble
keeping within budget and on schedule. More delays are expected.
Once completed, Ichthys will produce 8.9 million tonnes of
LNG per year.
Inpex holds 62.245 percent of Ichthys and France's Total
30 percent. The rest is spread amongst Taiwan's CPC
Corp and Japanese utilities Tokyo Gas, Osaka
Gas, Kansai Electric, JERA Corp and Toho Gas
(Reporting by Sonali Paul in SYDNEY and Osamu Tsukimori in
TOKYO; Writing by Aaron Sheldrick; Editing by Tom Hogue)