INPEX's Ichthys start-up date delayed

Ichthys onshore facility in the Northern Territory

Ichthys onshore facility in the Northern Territory

The production start-up date at the Ichthys LNG Project in the Northern Territory has been delayed by more than six months amid claims by local unions that the project is severely behind schedule.

A statement released by INPEX’s Tokyo head office said production at the $34 billion project is now expected to take place in the third quarter of 2017 instead of December 2016.

INPEX also raised the anticipated production capacity of the Ichthys LNG Project up by 6 per cent to 8.9 MMt/a from the initially planned 8.4 MMt/a.

“While the project’s overall development was approximately 74 per cent complete as of June 2015, INPEX updated the production start schedule based on the findings of a detailed review of the project’s development schedule,” today’s statement said.

The delay is expected to increase the overall investment by about 10 per cent, according to today’s statement with INPEX stating that it plans to cover the costs of the project through its own funds as well as external loans.

“INPEX will guide the Ichthys LNG Project to success, working closely with its project partners, local communities, Australia’s federal government as well as the governments of Western Australia and the Northern Territory, other project stakeholders and the wider Australian public to seek their continued understanding and support,” INPEX President and CEO Toshiaki Kitamura said.

The company added that it will continue to diligently proceed with development work while prioritising safety and insisted the delay reflected the expectation of a shortened time frame between the start of production and the point where stable production is reached.

Completion figure under question

Today’s announcement, which will likely result in the Ichthys project not reaching production start-up for another two years, comes just days after a raft of allegations were made against construction contractor JKC – a joint venture between JGC Corporation, KBR and Chiyoda Corporation.

The Electrical Trade Union and Unions NT alleged that JKC “covered up” an incident on 3 September where one worker was crushed by an elevated platform, and failed to appropriately report numerous incidents as a lost time injury (LTI) in recent months.

Unions NT representative Paul Kirby told Gas Today that the Ichthys project was nowhere near the company’s 74 per cent completion mark.

“They’re saying that they are more than 70 per cent through the construction phase of the project,” he said.

“But we had a local partners meeting the other day with them and they said, ‘don’t quote us on this, but we are closer to 40 per cent than 70 per cent’.”

“So where they are saying they are just a quarter behind, it is more accurate to say they are well over just three months behind.”

When asked if the union’s claims were accurate, a spokesperson for INPEX in Tokyo told Gas Today that the 74 per cent completion figure was correct.

The Ichthys LNG Project is led by operator INPEX (62.245 per cent) alongside TOTAL (participating interest: 30 per cent), CPC Corporation Taiwan (2.625 per cent), Tokyo Gas (1.575 per cent), Osaka Gas (1.2 per cent), Kansai Electric (1.2 per cent), Chubu Electric Power (0.735 per cent) and Toho Gas (0.42 per cent).

Eddie Morton is associate editor at Gas Today:

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