Inpex is currently finalising the number of people it will hand redundancies to at its Ichthys LNG project in the Northern Territory, with the Electrical Trades Union (ETU) confirming the figure was above 1000.

With construction work on the project's onshore LNG facilities at Blaydin Point predominately to have included earthworks and village construction civil works to date, an Inpex spokeswoman told Oil and Gas Investor Australia that this stage of works was well advanced. The next stage is set to include mechanical and electrical works.

"As a result of civil works significantly progressing towards completion, people will complete their roles and therefore receive a redundancy," the spokeswoman said. "Numbers are being finalised. Work in the mechanical and electrical phase will then start to ramp up next year. This is a natural part of the project cycle."

While Inpex is yet to confirm the exact number of workers to be cut, ETU NT organiser Paul Kirby confirmed to Oil and Gas Australia that the figure would be 1200. The total workforce on that part of the project has been estimated at about 4000, meaning about 30 per cent of the workforce could be shed.

Australian firm Leighton Contractors is the major contractor for the civil part of works at the mega-LNG development. Kirby expects 600 workers from Leighton and another 600 "low-tier" subcontractors, predominately local workers, would be handed redundancy roles.

Kirby said the timing and nature of the news was disappointing, with Christmas not far away. Inpex said a formal mechanism was in place to assist workers to be re-employed on the project.

"For a period of time, the company is funding training for the workers who have completed the civil stage and been made redundant to provide an opportunity to update or gain additional skills," Inpex said.

However, Kirby said the opportunity wouldn't extend to everyone.

"If there are trades assistances that haven't had any formal electrical licence at all then that's a four-year term to try and enter into that body of work," he said.

He added that he wasn't sold on Inpex's claims that the redundancies are part of the project transitioning to a new phase, believing part of the blame lay with the delay in LNG plant-building modules being shipped.

"If you looked at where the project five years ago was planned to be in 2014 they [Inpex] would be well behind where they wanted to be and certainly those modules not turning up has meant the job hasn't been as fluid as it could have been," he said. "It has created some significant headaches."

Inpex didn't address the module delay claims but said the project had enjoyed high levels of local employment throughout construction averaging 60 per cent. "The project has worked hard to keep people on the job for as long as possible and remains committed to maximising the employment of locally-based workers where realistically achievable," Inpex said.

The Ichthys project has been in the headlines lately, but not for good reasons. The company was recently forced to reaffirm the projected US$34 billion cost estimation in the wake of speculation of a possible cost overrun.

The project, which is expected to produce 8.4 mtpa of LNG, remains on track for first gas at the end of 2016.

Lauren Barrett can be reached at lbarrett@hartenergy.com.

Comments