(EnergyAsia, January 17 2012, Tuesday) — Japan’s INPEX Corp and France’s Total have given their final approval to proceed with their joint US$34 billion investment to develop the Ichthys liquefied natural gas (LNG) project in Australia’s Northern Territory state.

INPEX chairman Naoki Kuroda made the announcement in Darwin city, the site of the one of the world’s largest onshore gas facilities to process and produce 8.4 million tonnes of LNG a year, most of it for export to Japan, from end-2016.

Ichthys is based on two LNG trains at Blaydin Point, with additional land already made available by the state government for the possible addition of another four trains.

Gas from the offshore Ichthys field in the Browse Basin off the coast of Western Australia will be delivered via a 889km pipeline for processing onto the onshore terminal in Darwin. Ichthys holds an estimated 12.8 trillion cubic feet (tcf) of gas and 527 million barrels of condensate.

INPEX, the operator, which holds a 76% stake in the project is awaiting the Australian government’s approval for its proposed sales of small stakes to Tokyo Gas Co Ltd (1.575%), Osaka Gas Co Ltd (1.2%) and Toho Gas Co Ltd (0.42%). Total will hold onto its 24% stake.

INPEX and Total recently concluded sales and purchase agreements mostly to Japanese customers for the project’s entire LNG production for 15 years from 2017. The buyers include Tokyo Electric Power Company, Tokyo Gas Co, The Kansai Electric Power Co, Osaka Gas Co, Kyushu Electric Power Company, Chubu Electric Power Company, Toho Gas Co and INPEX. Taiwan’s CPC Corp and France’s Total Gas & Power Limited are the project’s only non-Japanese customers.

Ichthys will  also produce 1.6 million tonnes/year of liquefied petroleum gases and 100,000 b/d of condensate at peak.

The project would help INPEX achieve its objective of doubling oil and gas production over the next decade.

Mr Kuroda said: “The Ichthys final investment decision (FID) announced by INPEX and Total signals the start of construction of one of the world’s largest LNG facilities based on an estimated 40 years of gas and condensate reserves from the Browse Basin offshore Western Australia.

“We will be securing vital long-term energy supply to Japan and our other customers while delivering sustainable economic and social benefits across Australia.”

Declaring Ichthys as the cornerstone of his company’s growth strategy, he said it would be the first time INPEX was leading a world-scale project as operator.

“Ichthys’ production volumes represent more than 10% of Japan’s LNG imports at current levels. Ichthys will provide a long-term stable supply of cleaner energy to Japan, and help Japan diversify its energy sources.

“Ichthys will contribute significantly to the growth of the Australian economy while strengthening friendly ties between Japan and Australia.”

The engineering, procurement and construction (EPC) contract for the onshore LNG plant and associated infrastructure has been awarded to the JKC joint venture comprising Japan’s JGC Corp and Chiyoda Corp, and KBR of the US.

The INPEX-Total consortium also confirmed the award of contracts for the project’s major offshore work packages: central processing facility to Samsung Heavy Industry; subsea production system to General Electric; subsea flow line construction and installation to McDermott and Heerema.

Three sets of contracts for a gas export pipeline went to Mitsui-Europipe, Sumitomo, Nippon Steel-Metal One (pipe manufacture), Mitsui-Bredero Shaw (pipe concrete coating), and Saipem (pipelay).

The award for the contract to build a floating production storage and offloading (FPSO) vessel is expected to be announced next month.