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Inpex, Total make FID for Ichthys LNG project

Inpex and Total SA have made the final investment decision to proceed with their $34 billion development of the Ichthys LNG project in northwest Australia.

The two-train, 8.4 million tonne/year project has received its FID, which signals the start of construction of one of the world’s largest LNG facilities and is based on an estimated 40 years’ supply of gas and condensate reserves in the Browse basin field. The gas will be piped more than 800 km to the LNG plant to be built at Blaydin Point near Darwin. Condensate will be sold via a floating production, storage, and offloading vessel at the field, which is off Western Australia.

The investment also is Australia’s second-largest resources project and brings the total capital committed to the country’s LNG sector to more than $175 billion (Aus.). In addition it is the largest single private sector investment ever made in the Northern Territory.

The FID comes just hours after Inpex announced an agreement to sell a 1.575% stake in the project to Tokyo Gas. Previously it had sold Toho Gas a 0.42% equity stake in the project.

In addition Inpex has now firmed up contracts with CPC Corp. of Taiwan and Chubu Electric Power and Toho Gas of Japan to take shipments of LNG from the Ichthys development. This brings total committed gas sales to just under the nameplate capacity of the proposed LNG plant of 8.4 million tpy.

CPC, Chubu, and Toho are buying 1.7 million tpy, 490,000 tpy, and 280,000 tpy, respectively, confirming the nonbinding agreements signed in June 2011.

The FID announcement follows Inpex’s move last week to firm up agreements with five Japanese buyers for 4 million tpy of LNG in December. Inpex and JV partner Total are each taking 1.8 million tpy for their own use.

All agreements are for supply over 15 years.

Ichthys field was discovered in 2000-01. Reserves are put at 12.8 tcf of gas and 527 million bbl of condensate. The project will come on stream at yearend 2016.

In other news, Inpex has been awarded an “exceptional development permit” to build its planned accommodation village for the Ichthys LNG project workers at Howard Springs near Darwin.

The village will house some 2,700 fly-in, fly-out workers needed to build the LNG plant in Darwin Harbour. The village has been designed to be to cope with a further 800 workers if needed.

It is anticipated that work on the village construction will begin early this year.

Inpex has included vegetation buffer zones and low-level lighting to minimize potential impact on the surrounding community.

Partners in the project are Inpex 72.805%, Total 24%, Osaka Gas 1.2%, Tokyo Gas 1.575% and Toho Gas 0.42%.


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