The Western Australian (WA) government approved Ichthys $30-billion liquefied natural gas (LNG) project in the state. It would be the first Japanese LNG development scheduled to start in early 2012.

The WA Department of Mines and Petroleum granted production licences to Ichthys.

On the same day, Inpex Corporation of Japan announced it would sell $70-billion worth of LNG from its Ichtys project in Australia to five Japanese utilities after it inked a 15-year sales agreement to help meet Japan's rising demand for LNG imports as the country moves away from nuclear energy following the March 11 earthquake.

Inpex is scheduled to start shipment by 2017 to Tokyo Electric Power, the operator of the Daiichi nuclear power plant in Fukushima, Tokyo Gas, Osaka Gas, Kyushu Electric Power and Kansai Electric Power.

Under the agreement, Tokyo Electric and Tokyo Gas would buy 1.05 million metric tonnes of LNG each yearly, Osaka Gas and Kansai Electric would purchase 800,000 tonnes and Kyushu Electric 300,000 tonnes annually.

The Ichtys project is Japan's largest single financial investment in Australia, said federal Energy Minister Martin Ferguson. He added that different companies since 2007 have committed at least $143.8 billion to LNG projects which would quadruple Australia's LNG capacity within five years.

Mr Ferguson said that Australia is expected to compete with Qatar as the world's top exporter of LNG by 2016.

Inpex and its joint venture partner, Total of France, plan to build the LNG terminal in Darwin. The facility, 76 per cent owned by Inpex, would have a yearly production capacity of 8.4 million metric tonnes of LNG.

The project would have to compete for labor and equipment with at least six competing LNG projects already underway, including Chevron's $37-billion Gorgon LNG project in WA and three ventures in Queensland that would convert coal seam gas to LNG.

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