Major LNG project receives boost with financial backing

THE completion of $20 billion project financing arrangements for the Ichthys LNG project have secured it as one of the largest natural gas projects in Australian history. The project now holds the title of
the biggest project financing ever arranged on the international financial market.
Funds for the INPEX-led Ichthys development were organised through eight export credit agencies (ECAs) and 24 commercial banks, including direct loans from ECAs such as the Japan Bank for International Cooperation, which is lending US$5 billion; and Nippon Export and Investment Insurance, which is lending US$2.75 billion.
The Ichthys project is a joint venture between INPEX (about 66 per cent), Total (30 per cent), Tokyo Gas (about 1.6 per cent), Osaka Gas (1.2 per cent), Chubu Electric (about 0.74 per cent, subject to the Australian Government) and Toho Gas (0.42 per cent). All joint venture partners in the project have guaranteed lenders the loans will be repaid during construction. Japan Oil, Gas and Metals Corporation is undertaking part of INPEX’s liability, which is limited to US$2 billion.
“The finalisation of the project financing arrangements is a major milestone in ensuring the successful development of the promising Ichthys LNG project that will contribute not only to a long term stable
supply of cleaner energy to Japan but also to a diversification of Japan’s energy sources,” a statement from INPEX read. Ichthys represents the first time INPEX has lead a ‘world scale’ LNG project as operator.
Work is now being undertaken on detail designs and materials procurement for the project’s onshore and offshore facilities. Site preparation is well underway for the onshore LNG plant, while dredging
work in Darwin Harbour and pipe manufacturing for the gas export pipeline continues. At the end of October 2012, the project was 9 per cent complete.
The Ichthys gas field will produce 8.4 million tonnes per annum of LNG, 1.6mtpa of LPG and about 100,000 barrels of condensate per day at its peak for about 20 years. First production is expected at the end of 2016, with first LNG sales beginning in 2017 and continuing for about 15 years.

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