Inpex's Ichthys Project Produces First Gas
Japan’s Inpex Corporation said July 30 that the Ichthys LNG project offshore northern Australia, which has overrun budgetary and time targets, has commenced production of gas.
The first offshore production well has been opened up. This followed completion of final safety verifications, including additional checks concerning electrical equipment.
The first shipment of LNG is expected to start by end of September. “The project expects to begin the shipment of products towards the end of the first half of the current fiscal year,” Inpex said. The Japanese fiscal year runs from April to March.
The gas production was to commence in May but was delayed thanks to Australian regulator National Offshore Petroleum Safety and Environmental Management Authority (Nopsema) finding safety issues on the offshore platform of the project. The Inpex-operated project was in fact due to have started up 2016 but its development has overrun and its cost has almost certainly topped the original $34bn price tag.
Total CEO Patrick Pouyanne said early this year that Ichthys's cost could rise to US$40bn, which would make it one of the most expensive LNG projects per mt/yr installed ever. Inpex as operator has a 62.245% stake in the project while French Total has 30% interest. The rest is owned by Taiwan’s CPC Corporation (2.625%) and five Japanese utilities: Tokyo Gas (1.575%), Osaka Gas (1.2%), Kansai Electric Power (1.2%), Jera (0.735%) and Toho Gas (0.42%).
Inpex stated that the forecasted consolidated financial results for the year ending March 2019, which factor the project’s expected revenue contributions, are currently being evaluated taking into account the oil price outlook and other factors, and will be announced immediately if forecasts are revised.
At full capacity, Ichthys's offshore facilities are expected to produce 1.6bn ft3/d gas (285,000 barrels of oil equivalent per day) and 85,000 b/d condensate. The gas will be exported to an 8.9mn mt/yr capacity onshore LNG plant for the Asian market; the plant will also have capacity to produce about 1.65mn mt/yr of LPG and 15,000 b/d condensate.