Arrow Energy is set to cull its workforce with more than 250 jobs on the line.
In a statement Arrow said it had “conducted a review of staffing levels as it manages costs.”
“While the company acknowledges this will be a difficult time for employees, it is committed to supporting them through this transition,” a spokesperson said.
“The company remains focused on finding additional value and reducing overall costs.”
CourierMail reports managers are expected to travel to regions such as Moranbah and Dalby in the next few days to deliver the bad news.
It comes as Shell told Arrow that the proposed plant was underperforming compared to other investment opportunities.
While the project has received most of the environmental approvals required to start construction, Shell has signalled it is considering several options for the LNG plant including a merger with one of the other near-completed facilities on the island.
Arrow said it “will continue to assess development options, including collaboration opportunities, as it looks to develop significant gas reserves.”
Arrow’s LNG plant was projected to create around 3,500 jobs, and convert 18 million tonnes of coal seam gas a year into LNG ready for export.