Securing the future of LNG for Australia

THE final investment decision for the Ichthys LNG project in January marked a major milestone for Inpex, positioning the company as a future major player in the world’s LNG market.
The project is a joint venture between Inpex (operating with a 76 per cent interest) and Total (holding a 24 per cent interest). Gas from the Ichthys field, in the Browse Basin about 200km offshore WA, will undergo preliminary processing offshore to remove water and extract condensate. The gas will then be exported to onshore processing facilities in Darwin via an 889km subsea pipeline.
The project is expected to produce 8.4 million tonnes per annum of LNG and 1.6mtpa of LPG, plus 100,000 barrels of condensate at peak. Ichthys is the largest of more than 70 projects of which Inpex holds a stake across the world. It is Japan’s largest investment in Australia, and as a result of Total’s stake in the project, Ichthys will be the biggest French investment in the country. Resources and Energy minister Martin Ferguson publicly acknowledged that Ichthys
served Australia’s national interest, while Japan’s Economy, Trade and Industry senior vice minister Tadahiro Matsushita said that the project would play an important part in developing relations between Japan and Australia.
Long before the Ichthys field was discovered, Japan had underpinned the first steps to develop an LNG export industry in Australia. Last year, Australia exported 19.8 million tonnes of LNG, most of which went to Japan. As a result, Australia became the largest supplier of LNG to Japan, passing Malaysia and Indonesia.
Inpex and other participants of the Ichthys project aim to build on that performance. The company stated that the level of Japanese involvement in the Australian LNG export industry was a testament to Australia being one of the most stable countries in the world.
Ichthys has secured 15-year sales contracts for all of its projected output, with about 70 per cent of that output destined for Japan. The world’s demand for clean energy, through the increasing use of LNG, has experienced significant growth in the last decade. All of these factors make Ichthys the crown jewel in Inpex’s oil and gas portfolio.
In 2011, Goldman Sachs projected that deepwater activity in the conventional LNG space would grow most rapidly in Australia and Brazil, recognising that the LNG market was being driven by Australian projects. Ichthys will be a major contributor to Australia’s growing LNG landscape for decades to come.

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