Before it left the Ichthys project, Laing O’Rourke had been constructing four cryogenic storage tanks since mid-2013 (Inpex)

Fatality halts work on Australia’s huge Ichthys LNG project

4 December 2017 | By GCR Staff 1 Comment

A worker’s death on 29 November has halted construction on the troubled $37bn Ichthys liquefied natural gas (LNG) project in Australia, which has been hit by delays, cost overruns and the defections of big contractors such as Laing O’Rourke and Cimic.

The developer, Japan’s Inpex Corp, stopped work at its Bladin Point construction site in Darwin at approximately 8pm on the day.

“INPEX Operations Australia Pty Ltd sincerely regrets to confirm a serious incident occurred at its Bladin Point construction site in Darwin at approximately 8 pm last night, that resulted in the death of a worker,” the company said in a statement, reports Reuters.

The company said it was “co-operating fully with relevant authorities”, but declined to comment further on what led to the worker’s death or when construction might resume.

The Ichthys project, led by Inpex, is both Japan’s biggest overseas investment and first LNG megaproject, Reuters noted. It is more than a year behind its original target, with first production now expected by March 2018.

Costs have ballooned more than 10% to around $37bn since the project was approved in 2012. The development is co-owned by Inpex, France’s Total SA, Taiwan’s CPC Corp, and Japanese gas and power companies.

In March this year UK-based contractor Laing O’Rourke became the second major contractor to quit the project, saying it had not been paid in months and calling off around 800 staff.

In January Australian giant Cimic also pulled its recently acquired subsidiary UGL off an Ichthys-related contract.

Australia has seen a bonanza of LNG-related schemes following the discovery of the Ichthys gas field 220 kilometres off the northern coast of Western Australia.

This has led to the launch of eight major LNG processing projects, with a total investment of around $200bn, including Chevron’s even bigger $54bn Gorgon LNG facility.

Faced with intense competition for equipment, skilled labour and resources, many of these projects have been hit with delays, legal disputes and cost overruns, calculated by Bloomberg to amount to $55bn.

Image: Before it left the Ichthys project, Laing O’Rourke had been constructing four cryogenic storage tanks since mid-2013 (Inpex)