More than 800 workers have been made redundant from the approx. $34 billion worth Inpex-led Ichthys gas project in Darwin, Australia.
The Ichthys LNG project consists of three constituent parts. It incorporates facilities offshore the Western Australian coast, onshore processing facilities in the Northern Territory, and an 890-kilometer pipeline to unite them.
Recently, Inpex held a naming ceremony for facilities destined for the offshore part of the project. The central processing facility was named Ichthys Explorer, while the floating production, storage and offloading facility (FPSO) was named the Ichthys Venturer.
The CPF and the FPSO will be permanently moored for 40 years of operation in the Ichthys field in the Timor Sea, about 220 kilometers off the Western Australian coast. Once in production, most condensate will be transferred from the CPF to the nearby FPSO for offshore processing, with the remainder sent to Darwin with the gas via the project’s 890 kilometer gas export pipeline.
On Wednesday morning, Australia’s trade union, Construction, Forestry, Mining, and Energy Union (CFMEU), received notice that contractor Laing O’Rourke was immediately relinquishing its Ichthys project contract over a pay dispute between the company and Kawasaki Heavy Industries (KHI).
As a result, 644 direct employees of Laing O’Rourke and 200 sub-contractors were made redundant.
This was not the first instance that such an event occurred. Back in January, 500 workers were abruptly made redundant over a pay dispute between the managing contractor JKC and UGL over a figure north of $600 million.
CFMEU Divisional Branch Assistant Secretary, Andrew Sutherland, said: “It is unprecedented that in a matter of months two major companies, UGL and Laing O’Rourke, have pulled out of the $34 billion project which has resulted in close to 1,400 workers being made redundant.
“These disputes highlight that the managing contractor JKC doesn’t have any idea how to manage contractors on a project of this size. The CFMEU is calling on the managing contractor JKC to step up and resolve this issue between Kawasaki and Laing O’Rourke to ensure these 850 workers are re-employed.”
Laing O’Rourke said that its contract is for the construction of four cryogenic tanks on the project for JKC Australia was signed in 2012. According to O’Rourke, work began on site mid-2013 and is currently in its final stages.
The company claims that KHI, which leads this phase, did not pay Laing O’Rourke for its work on the project for several months.
Laing O’Rourke added that it had made efforts to resolve the matter, but direct approaches to KHI in Japan over recent weeks have failed to produce a satisfactory outcome. The company further said its priority is to now attempt to redeploy staff to the national pipeline of projects whilst also assisting sub-contractors impacted by this demobilization.
Contrary to negative developments with onshore jobs, the Maritime Union of Australia (MUA) recently signed new work arrangements with Inpex for the Ichthys project ensuring support for up to 2,000 Australian jobs.
Offshore Energy Today Staff