Ichthys is the second-last of Australia’s $200 billion-plus wave of new LNG projects to come online, with only Shell’s floating Prelude venture still to go. It is one of the world’s most complex liquified natural gas projects. Exports from the new plants are expected to make Australia the world’s largest exporter of LNG by 2019 or 2020, and expected to overtake Qatar.
This highly expensive and complex built project is Inpex’s biggest investment and the largest for Japan overseas. After a number of delays the gargantuan Ichthys LNG project which commenced its operations in 2012 in the Northern Territory finally shipped its first cargo from its 40-year project. Delays were seen ever since the start to the year. The delays were partly due to major bottlenecks faced from Korean shipyards building the offshore platform and production ship. However, such larger projects when initiated will have delays but wide range of issues included contractor disputes, technical glitches and non-supporting weather conditions. Ichthys which is the first operated LNG project of Inpex seems to be of importance while a definite date for the start of the exports is yet to be given. During the month of July this year, the company announced that various minor issues have to be addressed in the final safety check but as such no major problem was encountered with the facilities at that moment with the contractors building the power plant and the LNG tanks simply walked off during the months of January and March. During April first production was pushed back six months.
The deadline of September 30 was initially set as a first shipment consignment by Ichthys operator. The project is expected to produce around 8.9 million tonnes of LNG annually which will impact about 10% of Japan’s annual LNG demand, 1.65 million tonnes of LPG and at the peak 100,000 barrels of condensate annually. The shipment consignment for $US40 billion project, is located 220 kilometers off western Australia and 820 Kilometers south-west of Darwin, and has encountered a series of major delays on account of which the project cost has significantly shown a hike from its initial costing estimated at $US 34 billion.
To reach full production, Ichthys might take a span of two to three years and this will be a significant boost for Inpex which holds 62.245% of Ichthys, as the expected project is supposed to account for $435 million profit as per the forecast for this year. This project will give a valuable experience to Inpex, which can be utilized and implemented in Abadi LNG project in Indonesia which is expected to be commenced in the later part of 2020 by the company.
Ever since the shipment of first cargo after so many delays and bottlenecks encountered by the company, market expects a positive story ahead for the company in a span of few years which can give a boost to the company’s growth in future as well as the same experience will pave the way for future projects expected to be laid down by the company.
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