Japan’s Inpex files lawsuit against Ichthys LNG contractor

Japan’s Inpex, the operator of the Ichthys LNG development in Australia, has filed a lawsuit against the project’s EPC contractor JKC, according to one of the partners, JGC.

Ichthys LNG filed the lawsuit against JKC in the Yokohama District Court on April 16, 2021, Japan’s JGC said on Monday.

The joint venture consisting of JGC, which has a 40 percent share, and KBR and Chiyoda each with a 30 percent share, has won the design and construction contract worth about $15 billion back in 2012 to build the 8.9 mtpa LNG plant at Bladin Point near Darwin.

The three firms have completed and delivered the facility in 2018.

Additional payments

However, in the course of the execution of the project, subcontractors requested additional payments to cover their increased costs.

The plaintiff (Ichthys LNG) paid a funding deed in the sum of A$757.7 million ($593.4 million) to the JV for additional costs, JGC said.

Subsequently, a dispute concerning the settlement of the additional costs arose, leading to an arbitration in Singapore.

“During the course of the arbitration, the plaintiff demanded that the JV returns the full amount of the funds by the end of December 2020, but the JV refused on the grounds that the correct settlement procedures under the deed had not been followed and the arbitration award to determine this had not been made,” JGC said.

JGC to take “appropriate action”

Following this, the plaintiff delivered a letter dated January 15, 2021, to the parent companies of the JV.

Ichthys LNG requested from the firms to pay the same amount to the plaintiff based on parent company guarantee deeds, JGC said.

“However, the parent companies declined the request for the same reasons mentioned above,” JGC said.

Furthermore, JGC said it would examine the details of this lawsuit and take “appropriate action.”

Ichthys LNG is a joint venture between operator Inpex and major partner France’s Total.

Other partners include Australian units of CPC Corporation Taiwan, Tokyo Gas, Osaka Gas, Kansai Electric Power but also JERA and Toho Gas.

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