Japanese companies sign up for Ichthys gas

WORTH an estimated $70 billion, the confirmed sale of the entire 8.4 million tonnes per annum of LNG production from the Ichthys gas project has paved the way for its final investment decision, expected by mid January.
In early December, Ichthys LNG – a company jointly owned by Inpex Corporation and Total E&P – signed a legally binding sales and purchase agreement with a consortium of five major Japanese utility companies for a total of 4mtpa of LNG from the Ichthys onshore plant in Darwin, Northern Territory. Starting from 2017, the agreement includes the supply of LNG from the Ichthys project for 15 years to Tokyo Electric Power Company (for a total of 1.05mtpa), Tokyo Gas (1.05mtpa), Kansai Electric Power (800,000t per annum), Osaka Gas (800,000tpa) and Kyushu Electric Power Company (300,000tpa). This latest agreement will result in about 70 per cent of Ichthys LNG being delivered to Japan. Sales agreements with Chubu Electric Power Company, Toho Gas and Taiwan’s CPC Corporation, in addition to an offtake agreement by an Inpex and Total affiliate, was previously announced in June last year, making up the remaining 4.4mtpa of Ichthys production.
In a separate transaction, Inpex has also announced an agreement with Osaka Gas to transfer 1.2 per cent of its Ichthys project equity interest. As a result, Inpex’s interest has been diluted to 74.8 per cent, while Total’s stake in the project remains at 24 per cent. Operated by Inpex, the Ichthys project involves gas from the Ichthys field in the Browse Basin, offshore WA, being transmitted via an 889km subsea pipeline to an onshore LNG plant in Darwin. Along with 8.4mtpa of LNG, the project is also expected to produce 1.6mtpa of LPG and about 100,000 barrels of condensate per day at peak.

 

By Danica Newnham

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