In conjunction with Kawasaki Heavy Industries (KHI) of Japan, Laing O’Rourke has been constructing four cryogenic tanks on the Ichthys LNG project for JKC Australia LNG, under a contract signed in 2012. Work began on site mid-2013 and is in its final stages.
“KHI, which leads this phase, has not paid Laing O’Rourke for its work on this complex and resource-intensive remote engineering project for several months,” said a company statement last week. “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.
“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 said that its priority is to now to attempt to redeploy staff to the company’s national pipeline of projects whilst also assisting sub-contractors impacted by this demobilisation. It added that it has ensured all staff, suppliers and contractors have received their entitlements during the period of dispute. The company’s other project on the Ichthys site, which is direct for JKC, is unaffected.