Australia: Ichthys power plant contract terminated, hundreds of jobs affected

A $550 million contract for the construction of a combined cycle power plant for the Inpex-operated Ichthys LNG project in Australia has been terminated, leaving hundreds of workers in limbo.

The UGL-CH2M JV consortium has terminated its contract with JKC Australia for the design, construction and commissioning of the Ichthys CCPP, CIMIC, the new owner of Sydney-based contractor UGL, said in a statement on Wednesday.

“CIMIC’s current position in respect of the termination is adequately covered by provisions and it does not have any material impact to its financial performance in 2016 and 2017,” the statement said.

To remind, in June last year UGL lost a third of its value as it took a $200 million provision from the two Ichthys contracts the company was working on due to “client delays and disruptions.”

The company blamed Ichthys leading contractor JKC Australia, a consortium of Japanese engineering groups JGC and Chiyoda and US engineering group KBR, for the ongoing issues.

According to local media reports, today’s decision has affected up to 400 jobs at the plant site located at Blaydin Point near Darwin.

Ichthys LNG project is expected to start production by the third quarter of 2017, and is set to have an annual LNG production capacity 8.9 mtpa.

The project is a joint venture between Inpex, major partner Total, Taiwan’s CPC Corporation and the Australian subsidiaries of Tokyo Gas, Osaka Gas, Kansai Electric, Chubu Electric Power and Toho Gas.

LNG World News Staff