Japan's Inpex Says Ichthys Project a Little Behind Schedule


TOKYO, Feb 6 (Reuters) - Progress on the $34 billion Ichthys liquefied natural gas (LNG) project in Australia is slightly behind schedule but it is still on target to start commercial production by the end of 2016, operator Inpex Corp said on Friday.

Ichthys was 64 percent complete as of December, a little bit behind a target of around 70 percent, Managing Executive Officer Masahiro Murayama told a news conference on its quarterly earnings.

"For example, the drilling of production wells was delayed by about two months," he said. "But we have a catch-up plan to increase the drilling ships to two from the previous plan of one ship. We have not changed the schedule to start production in December 2016."

When Inpex made its final investment decision in January 2012, Brent crude was hovering around $110 a barrel, but Inpex is not worried about the profitability of Ichthys, despite the steep declines in oil prices, Inpex President and CEO Toshiaki Kitamura told Reuters last month.

Most Australian LNG exports including those from Ichthys are sold under long-term contracts linked to global oil prices.

The project, which is to produce 8.4 million tonnes of LNG a year, will pipe gas off western Australia to two LNG trains and other infrastructure near the coastal city of Darwin in Australia's Northern Territory.

Inpex, Japan's top oil and gas producer, 19 percent owned by the government, has a stake of more than 62 percent in the project, with Total and several other Asian energy companies among the shareholders.

On Friday the company revised down its full-year net profit forecast by 40 billion yen, or 25 percent, to 120 billion yen ($1.02 billion) for the year through March 31, hurt by the sharp decline in oil prices.

It said that took into account a one-off evaluation-related loss of around 20 billion yen on its resources for the full year.

($1 = 117.3000 yen)

(Reporting by Osamu Tsukimori; Editing by Alan Raybould)

Copyright 2016 Thomson Reuters. Click for Restrictions.


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