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Australia's Ichthys project to import LNG cargo to cool plant ahead of start-up

Published 23/04/2018, 05:38 pm
Australia's Ichthys project to import LNG cargo to cool plant ahead of start-up
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* LNG plant machinery must typically be cooled ahead of start-up

* Cargo could also be 1st export shipment in case of more delays

* Ichthys has seen several delays, cost overruns

* Condensate to be exported before LNG

By Jessica Jaganathan and Osamu Tsukimori

SINGAPORE/TOKYO, April 23 (Reuters) - Japan's Inpex Corp and its partners have bought a cargo of liquefied natural gas (LNG) to cool their Ichthys LNG plant in Australia ahead of a potential start-up of the much delayed facility, a company spokesman said on Monday.

To produce LNG, natural gas is cooled down to around minus 160 degrees Celsius, so facilities must be chilled before production can begin, typically by using fuel from other sites. Taking such a step indicates the plant, in northern Australia's Darwin, is getting closer to starting output.

The LNG tanker 'Pacific Breeze' is currently in the Java Sea and expected to reach Darwin on April 26, with a draft of 93 percent, suggesting it is almost full, according to Thomson Reuters Eikon ship tracking data. The ship has the capacity to carry up to 182,000 cubic metres of LNG, according to Inpex.

A spokesman for Inpex 1605.T said the vessel had been chartered to transport LNG bought from another LNG project with the objective of cooling the onshore Ichthys LNG plant ahead of the project's start-up.

He added the vessel's LNG could also possibly be used as a first export cargo should Ichthys experience further delays in production, but stressed this had not yet been decided.

The more than $37 billion Ichthys project has seen several delays and cost overruns of billions of dollars due to technical difficulties. Japan's top oil and gas producer, said in March it had postponed its latest planned start-up to April or May. The start was originally slated for 2016. newly-built Pacific Breeze is contracted to supply 1.75 million tonnes a year of LNG from Ichthys to Taiwan's CPC Corp.

CPC did not respond to queries for comment.

The vessel loaded a cargo in Singapore in late March after conducting sea trials.

Once the Central Processing Facility is commissioned at Ichthys, it will produce condensate - an ultra-light form of crude oil - before LNG, Inpex has said without giving a specific timeframe.

Taiwan's CPC, the biggest customer of Ichthys, is scheduled to take delivery of its first LNG cargo in the second half of this year, a source familiar with the matter said, declining to be identified.

Other customers of the project mainly include Japanese utilities.

Inpex holds 62.245 percent of Ichthys, France's Total TOTF.PA 30 percent, with the rest spread amongst Taiwan's CPC Corp CHIP.UL and Japanese utilities Tokyo Gas 9531.T , Osaka Gas 9532.T , Kansai Electric 9503.T , JERA Corp and Toho Gas 9533.T .

Exports from new LNG projects including Ichthys are expected to help Australia overtake Qatar to become the world's largest exporter of the super-chilled fuel by 2019.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Interactive Map

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https://reut.rs/2F95xNf

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