PERTH (miningweekly.com) – Services provider CIMIC has agreed to a A$492.5-million settlement in a contract dispute at the Ichthys liquefied natural gas (LNG) project, in the Northern Territory.
CIMIC, along with consortium partners Ch2M Hill Australia and General Electric Company, was in 2012 contracted by JKC Australia to carry out design, construction and commissioning work of a combined cycle power plant at the Ichtys project.
In early 2017, the consortium terminated the contract and commenced arbitration proceedings. The arbitration hearings were scheduled to start this week, but CIMIC has announced that it had entered into a conditional, and confidential, agreement with its consortium partners and JKC, resulting in the settlement of all matters relating to the contract.
CIMIC told shareholders that it would pay A$192.5-million in April this year, and a further A$300-million in March of next year, as its contribution to the settlement amounts.
The settlement agreement is subject to a number of conditions precedent related primarily to payment obligations, which are expected to be satisfied this month. Until the conditions precedent are satisfied, the arbitration will continue.