Another multi-billion dollar Liquefied Natural Gas project is approaching the starting line, taking the value of the projects so far approved to well over $100 billion, with a couple of more mega projects to come.
Japanese gas group, Inpex was yesterday given the green light by the federal government to develop the Ichthys Gas Field in Northern Australia under strict environmental conditions.
The project has a cost estimated at $25 billion.
Inpex will now decide by the December quarter of this year on the final go-ahead for the huge project.
But it says it has sold or is about to sell most of the project’s output into Japan and Taiwan, for delivery from 2017.
Inpex says the project has 12.8 trillion cubic feet of gas and 527 million barrels of high value condensate.
It follows the $43 billion giant Gorgon project, the $12 billion floating offshore LNG project of Shell, and the first stage of the Pluto project, now estimated to cost nearly $12 billion.
On top of that Woodside is expanding its operating northwest shelf operation at a cost of more than $US5 billion, while LNG projects from coal seam gas worth more than $35 billion have been approved or are approaching the go-ahead in Queensland.
As well, there’s the further expansion of the Pluto project (three possible further stages), the huge Wheatstone project of Chevron (which is the main player in Gorgon), perhaps one more floating LNG project for Shell and the Browse project of Woodside.
The Ichthys project is in the Browse Basin of WA and is 76% owned by Japan’s Inpex, while the rest is held by France’s Total.
It is estimated the project will lead to the production of 8.4 million tonnes of liquefied natural gas, liquefied petroleum gas and condensate each year, with more than 70% of the output to be delivered to buyers in Japan.
Environment minister Tony Burke announced yesterday that the federal government had approved Inpex’s proposed Browse Basin project, including a gas field facility, pipeline and processing facility.
"While there are significant economic benefits to this project, which must be a consideration in my decision, my focus has been on protecting matters under national environmental law," Mr Burke said in the statement.
The proposal includes offshore processing in the Browse Basin, a pipeline from the gas field to Darwin Harbour which will be more the 850 kilometres in length, and an onshore processing facility at Blaydin Point in Darwin.
Up to 50 production wells and a semi-submersible central processing facility will be constructed as part of the project.
"Inpex must develop a greenhouse gas management strategy outlining the measures and offsets it proposes to reduce greenhouse gas emissions before production can commence," Mr Burke said.
He said the company had to minimise waste and noise and needed to manage the waste from its activities to protect marine life.
He said Inpex, with the help of an expert panel, would develop and implement a rigorous environmental management plan.
That included protecting and managing about 2,000 hectares of vegetation and the habitat for dolphins, marine turtles and dugongs and map the habitat in the Darwin Harbour region.
Mr Burke said Inpex would provide $24 million for indigenous groups to manage marine mammals and reptiles.
Inpex said last Friday in Japan that more sales deal had brought the project closer to the go-ahead.
It said it now had "a clear prospect of completing the sales of the entire 8.4 million tonnes per annum of LNG from the Ichthys Project".
The Ichthys Project Joint Venture has reached an agreement with Chubu Electric Power Co. on LNG sales of 490,000 tonnes per annum, with Toho Gas Co. on LNG sales of 280,000 tones per annum and with CPC Corporation of Taiwan on LNG sales of 1.75 million tonnes per annum, over 15 years commencing in 2017.
Inpex and a TOTAL affiliate will also take a total of 1.8 million tonnes per annum of LNG from the Ichthys project.
Furthermore, LNG marketing negotiations are close to being finalised with five other major Japanese utility companies.
"This results in that the LNG volume of 8.4 million tonnes per annum will have been sold with a large part of the Ichthys LNG to be delivered to Japan.
"The LNG sales and purchase agreements with each of the respective buyers are expected to be signed in a timeframe to allow for the final investment decision, due in 4th Quarter 2011," Inpex said.
Inpex already operates the Bayu-Undan and Darwin LNG project. It has a couple of other LNG projects as well in different stages of development.
