Ichthys projects gets green light
Japanese oil and gas company, INPEX Corporation and the French giant TOTAL S.A. have confirmed the Final Investment Decision (FID) on the US$34 billion Ichthys LNG Project. The agreement was announced at a ceremony in Darwin, the site of the onshore gas processing facilities which will be built to produce 8.4 million tonnes of liquefied natural gas (LNG) per annum.
INPEX Chairman Naoki Kuroda said the Ichthys the Final Investment Decision signals the start of construction of one of the world’s largest LNG facilities based on an estimated 40 years of gas and condensate reserves from the Browse Basin offshore Western Australia.
Inpex Corp holds a 72.8 per cent stake in the venture, with Total holding 24 per cent and three Japanese utilities the balance of the equity.
The Ichthys project consists of the development of the Ichthys gas and condensate field offshore North West Australia (lying in 260 metres of water depth) and the construction of an 889 kilometres gas transmission pipeline together with an onshore LNG plant near Darwin in the Northern Territory.
The offshore facilities will consist of a subsea well development connected to a central processing facility (CPF1) for gas treatment and a floating processing, storage and offloading (FPSO2) vessel for condensates. The CPF and the FPSO will both be one of the largest in the world.
Onshore installations will consist of two LNG trains with a capacity of 4.2 million tons per year each and facilities for the extraction and the export of LPGs and condensate. In addition to its LNG production, the Ichthys project is expected to generate 1.6 million tons per year of LPGs and 100,000 barrels of condensate a day at peak.
Mr Kuroda said the Ichthys LNG Project was the cornerstone in the company’s growth strategy into the 21st Century and would be the first time INPEX was leading such a world-scale project as operator.
“Ichthys production volumes represent more than 10% of Japan’s LNG imports at current levels,” Mr Kuroda said. “Ichthys will provide a long-term stable supply of cleaner energy to Japan, and help Japan diversify its energy sources.
Mr Kuroda said the Ichthys LNG Project would help INPEX achieve its objective of doubling oil and gas production over the next decade.
INPEX and Total recently announced binding Sales and Purchase Agreements for the entire LNG production from the Project for 15 years from 2017.
In addition, the Project will produce an estimated 1.6 mtpa of liquefied petroleum gases. The liquids-rich gas stream will also generate approximately 100,000 barrels of condensate per day at peak.
Mr Kuroda said mobilisation for construction of the Project would start immediately with preliminary works at the Blaydin Point site due to commence within weeks.
Mr Kuroda confirmed that Engineering, Procurement and Construction (EPC) of the onshore LNG plant and associated infrastructure would be undertaken by the JKC joint venture, comprising JGC Corporation, KBR and Chiyoda Corporation. JGC, KBR and Chiyoda are leading global LNG companies, with JGC and Chiyoda headquartered in Japan and KBR headquartered in the United States.
At the launch ceremony in Darwin, Japan's Senior Vice-Minister of Economy, Trade and Industry, Tadahiro Matsushita, gave a personal apology to Australia for the wartime attack on Darwin in which 300 Australians were killed.
"I'd like to express my feelings of deep remorse and state my heartfelt apology", he said.