Laing O’Rourke says it was forced to quit work on a gargantuan liquid natural gas (LNG) facility in Darwin because it has not been paid.

The company has ‘demobilised’ about 800 workers on the US$34 billion Ichthys scheme.

Ichthys has been developed by a consortium led by Japanese oil and gas company Inpex since 2012.

The project was launched after the company discovered the giant Ichthys gas field 220 kilometres off the northern coast of Western Australia, which was the largest discovery of hydrocarbon liquids in Australia for over forty years.

The embattled project aims to produce up to 8.9 million tonnes of LNG a year, but has been hit by a string of cost overruns and delays.

Struggle continued this year when Australian giant Cimic pulled its subsidiary UGL off a contract to build a power station for the Ichthys facility it had been sharing with US engineer CH2M.

Cimic blamed Inpex’s lead contractor JKC Australia LNG for the issues it said cost UGL millions of dollars.

More recently, Laing O’Rourke had been working on four cryogenic storage tanks for JKC under a contract signed in 2012, with work reportedly reaching its final stages just before the company pulled the pin.

Laing O’Rourke says Kawasaki Heavy Industries (KHI), which is leading the works package, “has not paid Laing O’Rourke for its work on this complex and resource-intensive remote engineering project for several months”.

The contractor said it approached KHI in Japan, but “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,” the contractor said.

“KHI has declined to take those necessary steps.”

Laing O’Rourke is trying to redeploy the 800-odd staff to one of its other “significant national pipeline of projects whilst also assisting sub-contractors impacted by this demobilisation”.