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Japan's INPEX begins production in Australian LNG project

This July 30, 2018 photo shows an offshore central processing facility of the Inpex Corp.-operated Ichthys liquid natural gas project, off the northwest coast of Australia. (Photo courtesy of Inpex)((Kyodo)

SYDNEY (Kyodo) -- Japan's Inpex Corp. announced on Monday that its Ichthys liquefied natural gas project has begun production off the northwestern coast of Australia.

Shipments of LNG and liquefied petroleum gas from the project are expected to begin by the end of September.

The first Japanese-operated LNG project abroad, Ichthys is expected to annually produce approximately 8.9 million tons of LNG -- roughly 70 percent of which is intended for Japan.

Japanese LNG customers include Kansai Electric Power Co., Tokyo Gas Co. and Osaka Gas Co.

The facility will also produce 1.65 million tons of liquefied petroleum gas per year at peak production.

Under the project, gasses extracted from the offshore field are transferred via an 890-kilometer-long pipeline to an onshore plant in Darwin in northern Australia to be liquefied for shipment.

The Ichthys project is a joint venture between Japanese and Taiwanese partners, with Inpex holding a 62 percent stake in operations.

Inpex, which discovered the gas field in 2000, had been planning to begin production by the end of 2016, but the start date was postponed, partly due to a delay in designing an offshore facility.

According to the Australian government, Australia is the second largest LNG exporter in the world, currently selling almost 80 million tons of LNG per year.

Japan is the largest importer of Australian LNG, accounting for roughly 80 percent of sales, according the Reserve Bank of Australia.

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