LA DEFENSE (dpa-AFX) - Japanese oil and gas company Inpex Corp. (IPXHY.PK) and France's Total S.A. (TOT, TTFNF.PK, TTA.L) have decided to proceed with the $34 billion Ichthys liquified natural gas or LNG joint venture project off the coast of Western Australia.
The final investment decision was announced on Friday by Inpex chairman Naoki Kuroda in Darwin, the site of the onshore gas processing plant that will be built to produce 8.4 million tonnes of LNG each year.
Inpex will hold a 72.8 percent stake in the joint venture project, while Total will own a 24 percent stake. Tokyo Gas Co. Ltd., Osaka Gas Co. Ltd and Toho Gas Co. Ltd. will hold minority stakes in the Ichthys LNG project, subject to the Australian government's approval.
Kuroda said, 'The Ichthys FID announced today by Inpex and Total 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.'
The Darwin plant will process natural gas piped about 889 kilometers from the Browse Basin off Western Australia's Kimberley coast. The buyers of LNG gas from the project include seven Japanese utilities, in addition to Inpex, Total and Taiwan's CPC Corp. Production at the plant is expected to start by the end of 2016.
Further, Kuroda noted that Ichthys' production volumes represent more than 10 percent of Japan's LNG imports at current levels, and would be the first time Inpex was leading a world-scale project as operator. Inpex expects the project will help it to achieve its objective of doubling oil and gas production over the next decade.
Kuroda said engineering, procurement and construction of Ichthys' onshore LNG plant will be carried out by a joint venture comprising JGC Corp., KBR and Chiyoda Corp. Samsung Heavy Industries, General Electric and McDermott are among the other companies to be awarded contracts for the offshore work packages.
Inpex and Total recently announced binding sales and purchase agreements for the entire LNG production from the project for 15 years from 2017.
The Ichthys LNG project project will produce an estimated 1.6 million tonnes per annum, or mtpa, of liquefied petroleum gases. The liquids-rich gas stream will also generate about 100,000 barrels of condensate per day at the peak of production.
Inpex said that mobilisation for construction of the project would start immediately, with preliminary works at the Blaydin Point site due to commence within weeks.
According to Inpex, an estimated 3,000 jobs will be required in Darwin during the peak of construction, with a further 1,000 offshore. Once the project is in operation, the company will require about 700 permanent positions.
Inpex noted that the final investment decision or FID for Ichthys is based on two LNG trains at Blaydin Point. However, the company said that the government has set aside enough land for the possible future expansion of the project of up to four additional trains.
IPHXY.PK closed Thursday's trading at $16.45, down $0.14 or 0.84 percent on 9,222 shares, while TOT closed trading at $50.17, down $0.67 or 1.32 percent on 3.51 million shares.
Copyright RTT News/dpa-AFX
© 2012 AFX News
