With most likely reserve estimates of 12.8 trillion cubic feet of gas and 527 million barrels of condensate, the offshore gas field development is expected to deliver significant economical benefits to the Northern Territory and Australia.

The Ichthys Gas Field is located in permit area WA-285-P, approximately 440 km north of Broome and 850 km south west of Darwin.

The project is a joint venture between Inpex as operator and Total E&P Australia, and is expected to have an initial production capacity of more than 8 million tonnes per annum (MMt/a) of LNG, approximately 1.6 MMt/a of LPG and 100,000 barrels of condensate per day during peak production times.

These forecasted production volumes represent about 40 per cent of current Australian annual LNG production, about 60 per cent of current Australian LPG production and about 20 per cent of current Australian crude oil production respectively.

Gas from the field will undergo preliminary processing offshore to remove water and raw liquids, including condensate before being exported to onshore processing facilities in Darwin via an approximately 850 km subsea pipeline. It would be the second longest subsea pipeline in the world.

Inpex has selected Blaydin Point on the Middle Arm Peninsula in Darwin as the site for the onshore LNG plant. The site has the capacity to support two initial LNG trains with an opportunity for additional LNG trains to accommodate future expansion.

A final investment decision (FID) for the project is expected in 2010, with the first shipment of LNG scheduled to be loaded in 2015.

NT and WA vie for Ichthys

Originally, Inpex was considering both Darwin and the Maret Islands in Western Australia as potential onshore locations for the project.

The two sites would both require long pipelines from the field. Darwin is located 850 km from Ichthys, whereas the Maret Islands are located 190 km from the field.

In September last year, Inpex chose to develop the project in Darwin, with company President Naoki Kuroda stating that Darwin provided the company with the certainty required for the project’s tight schedule to enable the first LNG shipment to be made in 2015.

“Environmental, economic and engineering studies have demonstrated the viability of locating an LNG plant at Blaydin Point and have lent weight to this decision,” he said.

In November last year, the Northern Territory Government passed legislation regarding the associated Darwin LNG Plant, giving Inpex certainty that the project could be built at Blaydin Point, subject to environmental approval and the company’s FID.

Despite these developments, the Western Australian Government has continued to pursue the development of Ichthys in its state. Premier Colin Barnett has suggested that Inpex should reassess its choice of development location following the signing of a land agreement for a Kimberley LNG hub to be located at James Price Point.

Contracts awarded

The JKC joint venture, comprising JGC Corporation, KBR and Chiyoda Corporation, has been awarded the front-end engineering and design (FEED) contract for the Blaydin Point LNG plant, with the study underway and progressing well.

In addition, Inpex recently awarded the FEED contract for the offshore facilities to AMEC Engineering.

“AMEC is known for providing high value consultancy, engineering and project management services to the global energy industry. We are very pleased to have AMEC as part of the team,” said Mr Kuroda.

The offshore FEED services to be provided by AMEC will include the engineering of a semi-submersible central processing facility; a floating production storage and offtake (FPSO) vessel for condensate treatment and storage; umbilicals, risers and flowlines; and, the approximately 850 km export pipeline to Darwin.

Aker Solutions and JP Kenny will aid AMEC in conducting the FEED work. Aker will carry out the hull engineering for the central processing facility, and FPSO and JP Kenny will conduct the pipeline, umbilical, riser and flowline engineering.

Jobs for the future

To support project activities, Inpex opened an office in Darwin in April, located in the Mitchell Centre in Darwin’s central business district.

Inpex Darwin General Manager Sean Kildare said “This is a new era for Darwin and this is a great project with a lot of opportunities for local businesses and the community to benefit.”

The company has also contracted the Northern Territory Industry Capability Network (NTICN) to provide specialist Australian industry identification services. Through this a ‘project gateway’ has been established as the mechanism for communicating upcoming procurement and contracting opportunities.

Inpex has said that it is working closely with the Northern Territory Government and NTICN to ensure local industry participation in supplying goods and services.

To build the LNG plant, a peak construction workforce of more than 2,000 people will be required in Darwin over five years. A full-time workforce of about 300 people will be needed to operate and maintain the onshore facilities over the 40 year life of the project.

Ichthys excitemeNT

The development of the Ichthys Gas Field is an exciting prospect for the gas industry in Australia.

Federal Minister for Energy and Resources Martin Ferguson has put his full support behind the project’s development, stating that it will be a huge boost to the Australian economy.

“LNG is one of our most prospective opportunities to buffer the economy in the near term and kick start a new boom in the medium to long term,” said Mr Ferguson.

The Ichthys project is set to be the largest investment ever made in the Northern Territory and one of the largest resource investments nationally. Inpex said that the Ichthys project will showcase the Territory as a region capable of supporting the construction and operation of a major industrial development.