CIMIC ends Ichthys contract

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 02 Feb 2017   Posted by admin


Ichthys onshore facilities are located at Bladin Point near Darwin. Image: INPEX.


By Elizabeth Fabri


CIMIC has pulled the plug on UGL’s $550 million Ichthys power plant contract eight months ahead of scheduled first production.

The contract between CIMIC’s newly acquired subsidiary UGL and its joint venture partner CH2M, and INPEX subcontractor JKC Australia LNG was for the design, construction and commissioning of Ichthys Combined Cycle Power Plant (CCPP).

The Ichthys project was originally scheduled for competition at the end of 2016 but was pushed back to the third quarter of 2017 following a review of the project’s development schedule, which led to subsequent cost blowouts.

CIMIC inherited the power station contract for Ichthys in 2016 after taking over Australian engineering firm UGL.

In a brief statement CIMIC said its “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”, and when approached declined to provide further comment.

JKC Australia LNG project director John Bramley said JKC was “disappointed” the UGL-CH2M JV Consortium had taken this action, and were assessing the termination notice.

“As a result, construction work on the combined cycle power plant has temporarily ceased, however other activity continues.

“The engineering, procurement and construction of the combined cycle power plant is approximately 89 per cent complete, and JKC remains committed to delivering this scope of work and the overall Ichthys Project Onshore LNG Facilities.”

Mr Bramley said about 300 people had lost their job, of which 140 were locals and 160 were fly-in fly-out workers.

A spokesperson for INPEX said the dispute was a matter between JKC and its subcontractors.

“JKC is responsible for delivering the engineering, procurement, construction and commissioning of the Ichthys LNG Project onshore LNG facilities and related infrastructure,” the spokesperson said.

“Outstanding works to complete the remaining CCPP scopes are not on the critical path for the start of production.

“Our target remains to start production in the third quarter of 2017.”