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Japan's Inpex says Ichthys LNG project on track for March start

TOKYO (Reuters) — Japan’s top oil and gas explorer Inpex Corp is on track to begin production at its offshore Ichthys liquefied natural gas project in Australia by the end of March next year, a senior company executive said on Wednesday.

Inpex Ichthys Small
Photo courtesy of Inpex Corp.

It expects to take about two years to reach full-scale production through a gradual increase in utilization rates by conducting various tests, said Masahiro Murayama, Inpex’s senior managing executive officer.

The central processing facility and the floating production, storage and offloading facility have been connected to the seabed and undergoing tests, he said. Tests are also being done on the onshore LNG plant, he added.

“We are confident that the preparation for start-up has been progressing steadily,” Murayama told reporters during a briefing on the company’s first-half earnings.

Once the project reaches full-scale production, Inpex will consider various options including raising dividend or buying stakes in Ichthys field’s adjacent blocks for future projects, he said.

The startup of Ichthys was previously planned for the third quarter of this year, but the installation of offshore production facilities was delayed.

But Inpex has said that production of condensate, LNG and liquefied petroleum gas (LPG) would still begin by the end of March 2018, followed by shipments.

Inpex said it usually takes 2 yr for an LNG project to reach full production. But other companies got there faster, including Chevron’s Gorgon LNG project, also in Australia, which was operating fully after just over 18 mos.

Inpex on Wednesday raised its operating profit forecast for the year ending next March by 10.4% to $3 B, citing higher oil prices.

Reporting by Osamu Tsukimori; Additional reporting by Aaron Sheldrick; Editing by Manolo Serapio Jr.

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