All Systems Go for Australia-Japan LNG Project Partnership

The WA Department of Mines and Petroleum has finally given its stamp of approval to Inpex Corp. of Japan to push the development of its $30 billion Ichthys liquefied natural gas (LNG) project off WA's north. A final decision on whether to begin construction within weeks to early next year is expected to materialize.

Inpex Corp. said on Tuesday 70 per cent of the Ichthys project's 8.4 mtpa LNG production capacity, valued at $70 billion, has been sold to five Japanese utilities, including Tokyo Electric Power, Tokyo Gas, Osaka Gas, Kyushu Electric, and Kansai Electric.

Tokyo Electric Power and Tokyo Gas will each buy 1.05 million metric tons of LNG annually, while Osaka Gas and Kansai Electric at 800,000 tons each every year. Kyushu Electric will take 300,000 tons annually. All in all, the five firms committed to buy a total of 4 million tonnes per year of LNG for 15 years, effective 2017.

The Ichthys LNG project will also produce 100,000 barrels of condensate and 1.6 mtpa of liquefied petroleum gas daily.

The Ichthys LNG project, the first Japanese-operated LNG project in Australia, represents Japan's biggest single financial investment in the country, Australian Energy Minister Martin Ferguson said.

"With expected LNG output of 8.4 million tonnes per annum, the Ichthys LNG project has the potential to significantly boost Australia's standing as a major energy supplier," Ferguson said.

French energy company Total, a stakeholder in the Ichthys LNG project, will also buy 1.8 million tonnes from the project, while Osaka Gas has agreed to buy 1.2 per cent equity into the Ichthys LNG project.

The Ichthys LNG project, according to Ferguson, will push Australia's total LNG exports to 80 million tonnes per year by end of the decade, ahead of Qatar's export capacity of 77 million tonnes per year. Qatar is currently world's top LNG exporter.