Work has slowed at a $US36 billion ($A47 billion) LNG project in Darwin after more than 800 construction workers were stood down.

A dispute between Japan’s Kawasaki Heavy Industries and construction giant Laing O’Rouke is understood to be at the centre of the layoffs, the ABC reported.

Laing O’Rouke is building cryogenic tanks at the Ichthys LNG project, owned by Japanese giant Inpex Corporation, on behalf of Kawasaki.

The Construction, Forestry, Mining and Energy Union (CFMEU) confirmed 644 workers were “sacked”. Another 200 contractors were also made “redundant”.

“You go to work, and you get told at 6 o’clock in the morning that you’ve been made redundant and to get on a bus and leave,” Josh Burling from the CFMEU told a media briefing.

About 45% are local workers and the rest are fly in. “They are packing their bags and heading to the airport,” he said.

JKC, the consortium managing the construction of onshore facilities, says it expects the dispute to be resolved and work to continue.

The Ichthys LNG Project is a joint venture between INPEX group companies, major partner Total, CPC Corporation Taiwan and the Australian subsidiaries of Tokyo Gas, Osaka Gas, Kansai Electric Power, JERA and Toho Gas.

The project is expected to produce 8.9 million tonnes of LNG a year. The gas will pumped to onshore facilities for processing near Darwin via an 890 kilometre pipeline.

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