Inpex hunts growth in Australian 'heartland': OkawaDec 3, 2019 —...

Inpex hunts growth in Australian 'heartland': Okawa

Dec 3, 2019 — 12.00am

Japan's Inpex Corporation is seeking opportunities to expand its $US45 billion Ichthys liquefied natural gas project in Australia's north, with new exploration drilling and potential acquisitions also on the table.

The oil and gas giant, part-owned by the Japanese government, will look at options to build new LNG processing trains at the Ichthys site in Darwin once the existing two trains are operating at full tilt, and may seek to access new oil and gas resources from its Browse Basin fields, other offshore fields or onshore shale in the Northern Territory's Beetaloo Basin.

At this moment we have so many options and opportunities, and there is our own gas or third party gas that is one option. We never rule out any opportunity," Inpex Australia president director Hitoshi Okawa said.

"What I can say is the Beetaloo Basin onshore development is also one option," he added, describing the potential in the region as "significant".

Mr Okawa signalled that the various regulatory changes since the final investment decision in Ichthys in January 2012, including domestic gas security mechanism and petroleum royalty tax payment changes, posed little deterrent.

"Australia is our cornerstone and it is a very important area for us," he said in a rare interview in Perth.

"We have a range of discussions with the Australian government and we are very happy with their support, and because Australia has a very stable political setting and legal framework and financial regime that is very stable."

Inpex is in the final stages of ramping up production at Ichthys LNG to its full capacity of 8.9 million tonnes a year of LNG, plus LPG and condensates. After shipping its first LNG cargo in June, Mr Okawa said Ichthys reached its 100th LNG cargo milestone on November 15 after ramping up production more smoothly than expected.

Inpex's Ichthys LNG plant near Darwin has now shipped 105 LNG cargoes. Shaana McNaught

The venture, which is owned 26 per cent by French oil major Total and also involves several Japanese LNG buyers and Taiwan's CPC Corporation, represents Japan's largest single foreign investment in any sector.

It has now delivered 178 cargoes in all, including 105 shipments of LNG, 25 of LPG, 18 of condensates from the onshore operation in Darwin, and 30 exported directly from the offshore site, 220 kilometres off the Kimberley coast.

The huge project was originally budgeted at $US34 billion when it was given the green light for construction in January 2012 but suffered cost blowouts and delays.

Mr Okawa said Inpex's primary focus is on reaching and then maintaining full production at Ichthys to generate the cash flows required for expansion. That will involve looking at replacement gas opportunities as fields mature.

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