SYDNEY – Tokyo-based Inpex Corp. announced Monday that its Ichthys liquefied natural gas project has begun production off the northwest coast of Australia.
Start-up of gas production is a major milestone for the project, Japan’s biggest overseas investment and the first major energy development to be operated by the country’s top oil and gas producer.
Shipments of LNG and liquefied petroleum gas from the project are expected to begin by the end of September.
The first overseas-operated LNG project abroad, Ichthys is expected to annually produce approximately 8.9 million tons of LNG — roughly 70 percent of which is intended to be shipped to Japan.
Domestic LNG customers include Kansai Electric Power Co., Tokyo Gas Co. and Osaka Gas Co.
Under the project, gases extracted from the offshore field are transferred via an 890-km-long pipeline to an onshore plant in Darwin in northern Australia to be liquefied for shipment.
The Ichthys project is a joint venture between Japanese and Taiwanese partners, with Inpex holding a 62 percent stake in operations.
The project is expected to take two or three years to reach its full capacity of 8.9 million tons of LNG a year, along with about 1.7 million tons of LPG and around 100,000 barrels per day of condensate, an ultralight form of crude oil.
Inpex said it is reviewing expected revenue contributions from the Ichthys project for the year to March 2019, taking into account the oil price outlook and other factors, and will inform the market if its forecasts are revised.
Inpex, which discovered the gas field in 2000, had planned to begin production by the end of 2016, but the start date was postponed, partly due to a delay in designing an offshore facility.
According to the Australian government, Australia is the second largest LNG exporter in the world, currently selling almost 80 million tons of LNG per year.
Japan is the largest importer of Australian LNG, accounting for roughly 80 percent of sales, according the Reserve Bank of Australia.
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