Inpex Chairman Naoki Kuroda made the announcement in Darwin, the site of the onshore gas processing facilities, with Northern Territory Chief Minister Paul Henderson and Federal Minister for Resources, Energy and Tourism Martin Ferguson in attendence.

The Ichthys LNG Project is a joint venture between the Inpex group of companies (as operator) and Total group of companies. Gas from the Ichthys field in the Browse Basin offshore Western Australia will undergo preliminary processing offshore to remove water and raw liquids, including condensate. The gas will then be exported to the onshore processing facilities in Darwin via an 889 km pipeline.

The Ichthys LNG Project is expected to produce 8.4 MMt/a of LNG and 1.6 MMt/a of LPG, along with approximately 100,000 bbl/d of condensate at peak.

Mr Kuroda said “The Ichthys final investment decision (FID) announced today by Inpex and Total signals the start of construction of one of the world’s largest LNG facilities based on an estimated 40 years of gas and condensate reserves from the Browse Basin located offshore WA.

“In delivering this important project into production we will be securing vital long-term energy supply to Japan and our other customers while delivering sustainable economic and social benefits across Australia.”

Mr Kuroda said the Ichthys LNG Project was the cornerstone in the company’s growth strategy into the 21st century. He also added that the Ichthys LNG Project’s commercial strength would help Inpex achieve its objective of doubling oil and gas production over the next decade.

“Ichthys production volumes represent more than 10 per cent of Japan’s LNG imports at current levels,” Mr Kuroda said. “Ichthys will provide a long-term stable supply of cleaner energy to Japan, and help Japan diversify its energy sources.”

Inpex and Total recently announced binding sales and purchase agreements for the entire LNG production from the project for 15 years, beginning 2017.

Mr Kuroda said mobilisation for construction of the project would start immediately with preliminary works at the Blaydin Point site due to commence within weeks, and confirmed that engineering, procurement and construction of the onshore LNG plant and associated infrastructure would be undertaken by the JKC joint venture, comprising JGC Corporation, KBR and Chiyoda Corporation.

Mr Kuroda also confirmed contracts to be awarded for the major offshore work packages, including:

  • Central processing facility – Samsung Heavy Industry
  • Subsea production system – General Electric
  • Subsea flowline construction and installation – McDermott in co-operation with Heerema
  • Gas export pipeline – Mitsui-Europipe, Sumitomo, Nippon Steel-Metal One (pipe manufacture); Mitsui-Bredero Shaw (pipe concrete coating); Saipem (pipelay)
  • Floating production storage and offloading vessel – to be announced in the coming weeks.

Mr Kuroda said all successful tenderers to the Ichthys LNG Project in Australia had to demonstrate how they will maximise the use of Australian products and services.

“Ichthys will truly be an international collaboration. An estimated 3,000 jobs will be needed in Darwin during the peak of construction with a further 1,000 offshore. Once the project is in operation we will require approximately 700 permanent positions.”

Inpex and Total have already committed to an $A91 million environmental and social benefits package to provide long-term benefits for the community over the life of the project and beyond, which includes an $A3 million contribution to Charles Darwin University to accelerate plans for the North Australian Centre for Oil and Gas.

In 2010, Inpex and Total also contributed $A3 million to fund construction of the Larrakia Trade Training Centre, the biggest cross-training facility under one roof in the NT, which aims to deliver accredited qualifications, traineeships and apprenticeships to Aboriginal and non-Aboriginal students from across northern Australia.

Key environmental and production approvals have been received from the relevant authorities in Australia. The FID for Ichthys is based on two LNG trains at Blaydin Point, however the NT government has set aside enough land for the possible future expansion of the project of up to four additional trains.

Inpex is active in a number of projects in Australia and the Timor Sea, including the large-scale Ichthys LNG Project, Van Gogh, Ravensworth and Kitan oil projects, as well as the Bayu-Undan condensate development and associated Darwin LNG.