French supermajor Total and its joint venture partner Inpex Corporation, as expected, announced Friday that they are investing $34 billion in the Ichthys offshore liquefied natural gas (LNG) project in Australia.
Total holds a 24% interest in the project, which will develop approximately three billion barrels oil equivalent of reserves, including around 500 million barrels of condensate. First production is expected at the end of 2016.
"Through this project, Total further increases its presence in Australia and its access to the Asian LNG market, the fastest growing market offering high-value prices," said Yves-Louis Darricarrère, President of Exploration & Production, Total. "Total and Inpex have a long and successful history of working together all around the world. We are delighted to launch this world-scale project and to support it with our technical expertise and our best-in-class competencies in the management of very large projects."
The Ichthys project consists of the development of the Ichthys gas and condensate field offshore north-west Australia (lying in 853 feet, or meters of water depth) and the construction of a 552-mile (889-kilometer) gas transmission pipeline together with an onshore LNG plant near Darwin in the Northern Territory.
The offshore facilities will consist of a subsea well development connected to a central processing facility (CPF) for gas treatment and a floating processing, storage and offloading (FPSO) vessel for condensates. The CPF and the FPSO will both be one of the largest in the world.
Onshore installations will consist of two LNG trains with a capacity of 4.2 million tons per year each and facilities for the extraction and the export of LPGs and condensate. In addition to its LNG production, the Ichthys project is expected to generate 1.6 million tons per year of LPGs and 100,000 barrels of condensate a day at peak.
The entire annual production of LNG from the Ichthys project (8.4 million tons per year) has already been sold for 15 years under oil-linked price contracts, mostly directed to third-party consortiums of Taiwanese and Japanese buyers including Inpex. Total Gas & Power Limited, the gas trading subsidiary of Total, will also purchase 0.9 million tons per year of LNG from the project to supply directly its customers.
The plans for development and operation of the Ichthys project have been approved by Australian authorities, and construction will commence in the second quarter of 2012.
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