Inpex delays starting of production at $20bn Ichthys LNG project to Q3 2017

Japanese oil company Inpex has announced that production at the $20bn Ichthys LNG project is expected to be delayed to the third quarter of 2017.

According to the company, production was initially expected to start toward the end of December 2016.

Inpex is also expecting a 10% increase in cost, but the company plans to cover it through additional output.

The company said it plans to raise the annual LNG production capacity by about 6% to 8.9 MTPA from 8.4 MTPA which was planned initially.

The increase is based on the company’s recent technical evaluation of the technological information with regard to the entire LNG production system.

INPEX has worked on developing the project in various global locations when it announced its final investment decision on the Ichthys LNG Project in January 2012.

As of June 2015, the project’s overall development was about 74% complete and the company will continue to proceed with development work.

Inpex president and CEO Toshiaki Kitamura said: "The Ichthys LNG Project is a world-class project with an expected operational life of at least 40 years.

"All the LNG initially planned to be produced from the project has been sold. Of this, about 70% of the LNG is set to be supplied to Japan, and this is expected to further contribute to the long-term, stable supply of energy to the country and improve Japan’s energy procurement risk management."

The Ichthys LNG project is led by Inpex with a participating interest of 62.245% alongside Total (30%), CPC (2.625%), Tokyo Gas (1.575%), Osaka Gas (1.2%), Kansai Electric (1.2%), Chubu Electric Power (0.735%) and Toho Gas (0.42%).

The project is expected to be operational over a period of 40 years.

In February 2014, Australian engineering group Monadelphous received a $680m construction contract to carry out mechanical works at the project onshore LNG facilities in Darwin in the Northern Territory, Australia.

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Image: The Ichthys LNG Project’s FPSO will process and store condensate from the central processing facility. Photo: courtesy of Inpex