Ichthys FLNG Terminal
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Ichthys FLNG Terminal is an operating LNG terminal in Western Australia, Australia. An expansion to the facility has been proposed.
Location
Project Details
Trains 1 and 2
- Operator: Inpex[1]
- Owner: Ichthys LNG Pty Ltd[2]
- Parent company: Inpex (67.82%), Total S.A. (26%), CPC Corporation Taiwan (2.625%), Osaka Gas (1.2%), Kansai Electric Power (1.2%), JERA (0.735%), Toho Gas (0.42%)[3][4]
- Location: Browse Basin, Western Australia, Australia
- Coordinates: -17.961944, 122.236111 (approximate)
- Capacity: 8.9 mtpa[4], 1.28 bcfd (4.5 mpta per train[5])
- Proposed increase to 9.3 mtpa by 2024[6]
- Status: Operating
- Type: Export
- Trains: 2[4]
- Start Year: 2018
- Cost: US$45 billion[7][8]
- Financing: Initial construction loan package of US$20 billion consisting of US$5.83 billion in direct export credit agency (ECA) loans, US$5.37 billion in ECA-covered debt, US$4.8 billion in commercial bank debt from 24 lenders and US$4 billion in sponsor loans[9]
Expansion project (Train 3)
- Owner: Ichthys LNG Pty Ltd[2]
- Parent company: Inpex (67.82%), Total S.A. (26%), CPC Corporation Taiwan (2.625%), Osaka Gas (1.2%), Kansai Electric Power (1.2%), JERA (0.735%), Toho Gas (0.42%)[10]
- Location: Browse Basin, Western Australia, Australia
- Coordinates: -17.961944, 122.236111 (approximate)
- Type: Export[10]
- Capacity:
- Status: Proposed[10]
- Trains: 1[11]
- Start Year: 2030[12][6]
- Formerly 2023[10]
Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day
Background
Ichthys FLNG Terminal is an LNG terminal in Western Australia, Australia.[13] Ichthys FLNG is named after the Ichthys offshore gas and condensate field in the Browse Basin in northwestern Australia, from which gas is piped through the Ichthys Gas Pipeline to the terminal.
Ichthys FLNG is one of the most expensive liquefied natural gas projects in history.[14] Seventy per cent of the gas was slated to go to Japan.[15]
In 2008 the Ichthys facility's original budget was about US$20 billion.[16] In May 2017 it was US$37 billion.[14] Cost overruns and construction delays resulted in an increase of the total project costs to US$45 billion, according to Inpex in December 2018.[7]
Ichthys was approved in 2011. Construction on Ichthys began in 2012. It is slated to start-up in 2017.[17] The West Australian reported in September 2017 that 8,500 people were working just to complete the onshore facility at Darwin.[18]
Ichthys has a massive infrastructure. It has two Korean built floating offshore platforms. The gas fields off the Kimberly will feed the LNG. Broome's port and industrial zone, 450 miles away, will provide significant support.[18]
In July 2017 CBS News reported that Ichthys LNG may possess a major crack in the floating production storage and offloading unit that could cost billions.[14]
As of 2017, Australia is the second largest LNG exporter after Qatar. The country exports almost 44 million tons a year.[19]
In 2017 it was discovered that the petroleum resource rent tax had failed to collect billions of dollars in revenue north-west Australia. According to research at Monash University, Wheatstone LNG Terminal, Pluto LNG Terminal, and Ichthys FLNG Terminal were not subject to commonwealth royalties.[20]
The terminal began commercial operations in November 2018.[21]
In October 2022, LNGPrime reported that U.S.-based EIG's LNG unit MidOcean Energy had entered an agreement to purchase Tokyo Gas's share of four Australian LNG projects, including Ichthys FLNG Terminal. The deal was expected to close in the first half of 2023.[22]
In January 2024, it was reported that Inpex pre-empted Tokyo Gas’ intended sale to Australia’s MidOcean Energy Holdings and acquired the 1.575% stake held by Tokyo Gas in the project. Inpex thus has increased its shares in the project from 66.245% to 67.82%.[23]
Capacity increase
In February 2022, Inpex announced that it planned to boost LNG production capacity at the project by 4% to 9.3 mtpa by 2024 by debottlenecking the facility and increasing upstream production at the surrounding blocks.[24]
In January 2024, Inpex senior vice president corporate told Energy News that the company was still aiming to increase the project's capacity to 9.3 mtpa in 2024.[6]
Expansion project (Train 3)
Inpex has space to add four LNG trains at Ichthys LNG and has five points along its 890 kilometer (553 mile) pipeline from the Ichthys field to Darwin where pipelines from new gas fields could be tied in.[25]
According to the environmental plan, the proposed activities will be undertaken over five years. The offshore work is expected to start in the first quarter of 2021. Offshore installation would begin in 2020 and be completed in 2023.[10]
In February 2022, INPEX announced that it would seek to develop a third train for the Ichthys facility. The company stated that it would develop a carbon capture and storage facility alongside the expansion.[26]
As of January 2023, Inpex is considering a start date of the expansion project by 2030.[12]
In November 2023, Inpex stated again that it was evaluating a third train expansion. Industry experts state that this expansion is likely contingent on developing additional gas fields.[6]
In January 2024, Inpex senior vice president corporate told Energy News that the company was still intending to expand its production facilities by 2030.[6]
Climate and environmental impacts
In 2015 The Guardian reported that Australia's top 20 emitting facilities include the Wheatstone LNG Terminal, the Gorgon LNG Terminal, the Ichthys FLNG Terminal, and the Pluto LNG Terminal.[27] Australian environment group Market Forces has estimated that the Ichthys project will enable the release of 1.1 billion tonnes of CO2, double Australia's annual emissions, over the project lifetime.[28]
ABC News reported in March 2016 that Ichthys had tried to renege on $30 million worth of its environmental offset programs designed to help mitigate the environmental damage of the LNG.[15]
Government approval was conditional on the company delivering $91 million of environmental offset projects over the projects 40-year estimated life. The company had hoped to dump some of its marine life and land commitments. Ichthys had originally agreed to a joint program with Aboriginal rangers to manage dugong, coastal dolphins and turtles program along the coast.[15]
The company claimed that new studies showed that the environmental effects were not as great as originally anticipated, therefore some offset programs could be dropped.[15]
Carbon Capture and Storage (CCS)
In August 2022, the Bonaparte CCS Assessment joint venture between TotalEnergies, INPEX and Woodside was awarded a GHG Storage Assessment Permit for evaluation and appraisal work on block G-7-AP off the Northwest coast of Australia, with start of work scheduled for 2023. The Bonaparte CCS Assessment joint venture is aimed at reducing emissions from Ichthys FLNG Terminal.[1]
In July 2022, Inpex has signed a deal with the government of Australia’s Northern Territory to create a multi-user carbon capture and storage (CCS) hub, as part of its plans to reduce emissions from its Ichthys LNG export project.[29]
Financing
In 2013 the project reached financial close with an overall US$20 billion loan secured in four separate tranches:
- US$5.83 billion in direct ECA loans from Japan Bank for International Cooperation (JBIC), the Export–Import Bank of Korea (Kexim) and Export Finance Australia
- US$5.37 billion in ECA-covered debt featuring Kexim, K-sure and Nippon Export and Investment Insurance
- US$4.8 billion in commercial bank debt from 24 international lenders including Citi, HSBC, Mitsubishi UFJ, Mizuho, National Australia Bank and Sumitomo Mitsui Banking Corporation
- US$4 billion in loans from the project sponsors[9]
Additional US$600 million loan financing from commercial banks was closed in 2016,[30] and a US$3 billion refinancing loan was closed in 2017 featuring mostly the original commercial bank participants.[31]
In June 2020, the largest ever refinancing of project debt on a single facility took place when US$8.3 billion was raised for Ichthys. Citi and Mizuho acted as financial advisers on the refinancing, which involved seven export credit agencies and 28 bank lenders in total.[32] The refinancing partly covered the project's outstanding loan balance of US$15.6 billion as of June 2020. The refinancing was also part of the main shareholder Inpex's cost reduction initiatives launched in response to the decline in oil prices driven by the COVID-19 pandemic.[33]
In July 2022, further refinancing involving US$4.8 billion in debt reached financial close. This comprised a US$1.3 billion bond (arranged by Citi, Mizuho, Crédit Agricole, Société Générale, and MUFG), and a US$3.5 billion credit facility from a 21 bank lending consortium including the Australian banks ANZ and Westpac.[34]
Articles and resources
References
- ↑ 1.0 1.1 GIIGNL. The LNG Industry: GIIGNL Annual Report 2023. July 14, 2023.
- ↑ 2.0 2.1 "Ichthys LNG Project | Investment Projects". JERA. Retrieved 2022-05-24.
- ↑ "Ichthys LNG Project," NS Energy, accessed July 13, 2020.
- ↑ 4.0 4.1 4.2 International Group of Liquefied Natural Gas Importers (May 24, 2022). "Annual Report 2022 Edition" (PDF). GIIGNL. Retrieved July 11, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ International Group of Liquefied Natural Gas Importers (May 24, 2022). "Annual Report 2022 Edition" (PDF). GIIGNL. Retrieved July 11, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ 6.0 6.1 6.2 6.3 6.4 "Inpex eyes upstream acquisitions for Ichthys LNG expansion". Energy News Bulletin. Jan 19, 2024. Archived from the original on May 16, 2024. Retrieved May 16, 2024.
- ↑ 7.0 7.1 Peter Milne, Inpex’s Ichthys LNG cost blows out another $US5 billion, The West Australian, Dec. 14, 2018
- ↑ Sonali Paul. "Japan's Inpex eyes Australia expansion, including via acquisitions". U.S. Retrieved 2022-07-21.
- ↑ 9.0 9.1 "Ichthys LNG Financing," IJGlobal, accessed May 26, 2020
- ↑ 10.0 10.1 10.2 10.3 10.4 Amanda Battersby, Regulator runs rule over Ichthys subsea work Upstream Online, March 26, 2020
- ↑ Government, Northern Territory (2022-02-22). "INPEX commits to LNG expansion". cmc.nt.gov.au. Retrieved 2022-05-24.
- ↑ 12.0 12.1 "Inpex to accelerate expansion of LNG production and sales -CEO". Reuters. Retrieved 2023-07-20.
- ↑ Ichthys LNG Terminal, Company, accessed April 2017
- ↑ 14.0 14.1 14.2 Chery Kang, "Investors are worried there's a multibillion-dollar crack in one of the world's largest LNG projects," CBS News, July 7, 2017.
- ↑ 15.0 15.1 15.2 15.3 Kate Wild,"NPEX joint venture seeks to dump $30 million of federal environmental projects" ABC News, March 30, 2016.
- ↑ Peter Milne, "Inpex will pay nothing to extract oil and gas," The Western Australian, July 14, 2017.
- ↑ "2017 World LNG Report" International Gas Union, Accessed June 12, 2017.
- ↑ 18.0 18.1 Sarah Martin,"Joyce backs gas pipeline from WA to east coast," The West Australian, September 22, 2017
- ↑ Diane Munro, [http://www.agsiw.org/qatar-moves-ensure-lng-dominance/ "Qatar Moves to Ensure LNG Dominance ,"] Arab Gulf States Institute in Washington, April 17, 2017
- ↑ Gareth Hutchens,"Australia must charge royalties on natural gas or lose billions, says expert," The Guardian, February 8, 2017
- ↑ First Ichthys Condensate Shipped from Darwin Terminal, Maritime Executive, Dec. 27, 2018
- ↑ LNG Prime Staff (2022-10-07). "EIG's unit to buy Tokyo Gas' interests in four Australian LNG projects for $2.15 billion". LNG Prime. Retrieved 2023-07-20.
- ↑ "Inpex upping stake in LNG project after pre-empting compatriot's sale". Upstream Online. Jan 11, 2024. Retrieved May 15, 2024.
{{cite web}}: CS1 maint: url-status (link) - ↑ Kumagai, Takeo (2022-02-09). "INPEX to boost Ichthys LNG production capacity to 9.3 mil mt/year by 2024". www.spglobal.com. Retrieved 2022-05-24.
- ↑ Sonali Paul, Japan's Inpex eyes Australia expansion, including via acquisitions Reuters, September 13, 2019
- ↑ Government, Northern Territory (2022-02-22). "INPEX commits to LNG expansion". cmc.nt.gov.au. Retrieved 2022-05-24.
- ↑ Lenore Taylor,"Direct Action 'safeguards' will allow industry to increase emissions – analysts," The Guardian, September 2, 2015
- ↑ Why banks must abandon Australia's LNG industry, Market Forces, accessed July 19, 2022
- ↑ LNG Prime Staff (2022-07-22). "Inpex, Northern Territory to work on carbon capture and storage hub". LNG Prime. Retrieved 2022-07-27.
- ↑ "Ichthys LNG Additional Financing," IJGlobal, accessed May 26, 2020.
- ↑ "Ichthys LNG Refinancing 2017," IJGlobal, accessed May 26, 2020
- ↑ "Ichthys LNG refinancing closes," IJGlobal, accessed Jun. 17, 2020
- ↑ "Japan's Inpex says it has completed refinancing part of Ichthys LNG project funding," Reuters, Jun. 16, 2020.
- ↑ "Ichthys LNG Refinancing 2022," IJGlobal, accessed Jul. 19, 2022
