INPEX has established a joint venture with Total, a France-based firm, with the parties holding 76% and 24% shares, respectively. They announced on January 13th 2012 that they have taken the final investment decision for the Ichthys liquefied natural gas (LNG) project in Australia. The project budget jumped by 70%, from US$20 billion dollars to US$34 billion dollars because of commodities prices increase, local manpower overload in the region, an additional floating storage unit and the four times extension of the pipeline. Total expects to take 30% interest in the project which will develop approximately 3 billion barrels oil equivalent of reserves, including around 500 million barrels of condensate.
The first production is expected at the end of 2016.
The project FEED is performed for the upstream part by AMEC, with the support of Aker solutions and JP Kenny, while the onshore part by KBR in JV with JGC and Chiyoda.
The Ichthys project consists of the development of the Ichthys gas and condensate field offshore in the Timor Sea at North West Australia (lying in 260 meters of water depth) and the construction of:
– A $1 billion pipeline for 889 kilometers gas transmission
– A $15 billion onshore LNG plant near Darwin in the Northern Territory including two LNG trains with a capacity of 4.2 million tons per year each.
JKC, the JV between JGC, KBR and Chiyoda signed in February 2012 the formal EPC contract for this package.
– Facilities for the extraction and the export 1.6 Million t/y of LPGs (butane and propane) and up to 100,000 barrels of condensates per day
– A $1 billion subsea well development awarded to McDemott and Heerema, to be connected to
– An offshore central processing facility (CPF1) for gas treatment.
On January 19th Samsung Heavy Industries has won the $3 billion contract for this semi-submersible platform 110m wide and 110m deep, and the combined weight of 100,000 tons, making the plant the largest one of its kind in the world. The construction of the plant will be launched in 2013 to be delivered in the 4th quarter of 2015.
– A floating processing, storage and offloading (FPSO2) vessel for condensates.
Notably, the entire annual production of LNG from the Ichthys project (8.4 million tons per year) has already been sold for 15 years under oil-linked price contracts, mostly directed to third-party consortiums of Taiwanese and Japanese buyers including INPEX. Total Gas & Power Limited, the gas trading subsidiary of Total, will also purchase 0.9 million tons per year of LNG from the project to supply directly its customers.
The plans for development and operation of the Ichthys project have been approved by Australian authorities, and construction will commence in the second quarter of 2012.
