Ichthys LNG one step closer

Audrey Raj

February 1, 2016

Audrey Raj speaks to Japanese gas giant INPEX about its US$34 billion Ichthys LNG development and the key components that make up the offshore production facilities of the project.

The monoethylene glycol injection module is lifted and installed onto the hull of the Ichthys LNG FPSO in South Korea. 

In 2000, Japanese exploration and production company INPEX Corp., discovered a giant gas and condensate field in the Browse basin, about 200km offshore Western Australia.

The discovery was the start of what has become a multi-billion dollar liquefied natural gas (LNG) development, known as the Ichthys LNG project.

Operated by INPEX, the development partners are Total and CPC Corp. Taiwan, plus the Australian subsidiaries of Tokyo Gas, Osaka Gas, Kansai Electric Power, Chubu Electric Power and Toho Gas.

INPEX announced its final investment decision for Ichthys LNG in 2012. Currently in the construction phase, first production is scheduled for Q3 2017.

The project is expected to produce 8.9 MTPA of LNG and 1.6 MTPA of liquefied petroleum gas (LPG), along with up to approximately 100,000 b/d of condensate at peak production.

Gas from the Ichthys field will be exported to onshore facilities near Darwin for processing, via an 890km pipeline, and shipped as LNG to Japan and other markets, with long-term sales and purchase agreements already secured.

Meanwhile, condensate extracted from the field will be stored and shipped directly from a floating production, storage and offloading (FPSO) facility that is permanently moored at the field.

Ichthys LNG CPF. Photos from INPEX.

The FPSO, which features accommodations for up to 200 people, will process and store most of the condensate delivered from the project’s floating central processing facility (CPF) – the first semisubmersible production platform in Australian waters according to INPEX – before periodically offloading it to carriers for export.

Construction on the CPF module, weighing 3600-tonne and measuring 50m x 43m x 26m, began in January 2013. The hull was launched in September 2015 from the Samsung Heavy Industries (SHI) shipyard in Geoje, South Korea, where it is being constructed.

It is currently berthed by a quayside at the shipyard, with work continuing to install the living quarters, plus integrate and commission all equipment in preparation for its sail away.

Floating production facilities

INPEX is and has been involved in numerous LNG developments around the region, such as the Bayu-Undan project in the Timor Sea Joint Petroleum Development Area, the Prelude FLNG development in Western Australia and the Offshore Mahakam block and Tangguh LNG project in Indonesia, to name a few.

“These are all important gas projects contributing to our growth,” says Carlo Niederberger, a public relations representative of INPEX. “The knowledge and experience we have gained through these projects is today being applied to the Ichthys LNG project.

“Involvement in multiple projects allows us to continue to secure a balanced portfolio, while establishing appropriate risk management by combining different projects to ensure an optimal balance across key parameters, such as regional distribution and exploration, development and production activities,” he explains.

“In this instance, however, INPEX is the first-ever Japanese operator leading a large scale LNG development. The CPF, FPSO, subsea production system, flowlines and flexible risers make up the key offshore production facilities of Ichthys LNG.”

Hydrocarbons lifted from the production wells will be collected by the subsea production system and channeled through the flowlines and flexible risers to the floating CPF.

Here they will undergo initial processing to extract condensate and water, and remove impurities in order to make them suitable for transportation to the onshore gas liquefaction plant in Darwin through the gas export pipeline.

Niederberger says the FPSO, positioned about 3km from the CPF, will receive, process and store condensate from the CPF, and periodically offload stabilized condensate to shuttle carriers for direct export to the market, while sending re-pressurized natural gas back to the CPF.

“The FPSO, whose keel was laid in February 2014, is a key offshore component of the Ichthys LNG project. Designed to hold more than 1 MMbbl of condensate, the FPSO will be used for condensate dewatering, stabilization, storage and export. So, its importance cannot be overstated,” he says.

Construction of the 336m x 59m FPSO unit, being built in Korea by Daewoo Shipbuilding & Marine Engineering (DSME), is proceeding according to schedule. This year the facility will continue to undergo installation work and will then be towed 5600km to the Ichthys gas-condensate field, where it will be permanently moored for 40 years on a fixed turret from SBM Offshore.

Working the field

Installing the Ichthys LNG offshore gas export pipeline.

The Ichthys field’s estimated reserves are some 12 Tcf of gas and 500 MMbbl of condensate. To extract gas and condensate from the field, wells are being drilled in the Browse basin.

The drilling rig ENSCO 5006, which arrived at the field after undergoing major upgrades in Singapore, spudded the first development well in February 2015.

Initially targeting the Brewster formation with 20 production wells, drilling operations were being undertaken on 13 separate wells as of October 2015. The wells are being drilled into reservoirs about 4000-4500m beneath the seabed.

Economical benefits

Niederberger says the Ichthys LNG project is vitally important to Australia and particularly to the Northern Territory economy.

“In fact, in constructing the project, INPEX and its partners will contribute more than US$9 billion (AU$13 billion) to the Australian economy and $5.7 billion (AU$8.2 billion) in the Northern Territory alone,” he says.

“With a 40-year plus life span, the Ichthys LNG development offers a multi-generational economic opportunity. During operations, INPEX expects to employ approximately 1200 personnel, including about 750 to oversee production activities, along with services from a range of businesses to support the operation.

“The project is also a key part of the Northern Territory government’s plan to establish the area as the gateway to Asia and is expected to deliver considerable benefits,” Niederberger continues.

“This includes new business opportunities, major new and improved infrastructure and expanded economic, employment and training outcomes.”

Future plans

To ensure sustainable growth in the medium-to long-term, INPEX plans to focus first and foremost on safely bringing Ichthys LNG to production.

“This will be followed by efforts to proceed with the INPEX-operated Abadi LNG project offshore Indonesia, with the support of the Indonesian government and other project stakeholders,” Niederberger says

“INPEX also plans to strengthen its gas supply chain and reinforce its renewable energy initiatives. Specifically, the company will aim to reach a gas supply volume in Japan of 25 Bcm per year by the early 2020s.

“We are looking to also promote efforts to commercialize renewable energies, and reinforce research and development activities for the benefit of coming generations, and aim to become an integrated energy company with natural gas at its core,” Niederberger concludes.