Expert Project Management and Engineering Firms Assist Upstream Development of Ichthys Project

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Researched by Industrial Info Resources Australia (Perth, Australia)--The Ichthys pipeline project is nearing its final investment decision, and INPEX Corporation (TYO:1605) (Tokyo), the project operator, has contracted firms to assist in developing the technically challenging offshore works through project management and engineering consultancy.

Clough Limited (ASX:CLO) (Perth) and French engineering firm DORIS Engineering have joined to perform project management support services in a binding contract for the offshore component of the Ichthys project. The Offshore Integrated Project Management Support Services (IPMS) contract, which is valued at $248.82 million, was issued by INPEX on August 9, 2011, and executed on September 8, 2011. A limitation on spending has been placed on the Clough-DORIS joint venture team until a final investment decision has been made.

Ichthys joint venture partners INPEX Corporation (76%) and Total S.A. (NYSE:TOT) (Paris, France) (24%) are on schedule to sanction the Ichthys project in the fourth quarter of this year, including two LNG trains; LPG and condensate processing plants; a power plant; LPG, LNG and condensate storage tanks; a product-offloading jetty; and an 885-kilometer subsea pipeline between the offshore and onshore facilities. The planned production capacity for the project is 8.4 million metric tonnes per year of LNG, approximately 1.6 million metric tonnes per year (equivalent to 18.9 barrels per day) of LPG and 100,000 barrels per day of condensate.

The 42-inch diameter, 885-kilometer pipeline will be the longest in the southern hemisphere and the fourth-longest in the world. The Nord Stream Pipeline, which is 1,224 kilometres long and reaches Russia, Sweden, Finland, Denmark and Germany through the Baltic Sea, will be operational by the end of this year. The Langled pipeline is the longest operational pipeline at almost 1,166 kilometers and traverses the Norwegian Sea from the Ormen Lange field, which is owned by Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), off Norway to England.

The Ichthys pipeline will have an estimated 750,000 tonnes of steel and will include 75,000 joints to support its 885-kilometer length. Peritus International, a new global offshore engineering services provider with regional headquarters in London, Houston and Perth, provided engineering support to services from its Perth office to INPEX during 2010, whilst J.P. Kenny (Aberdeen, Scotland), a subsidiary of Wood Group plc (LSE:WG) (Aberdeen), worked on front-end engineering and design. In May of this year, Peritus International was awarded a non-exclusive engineering agreement by INPEX to provide consultancy services. Peritus International will undertake engineering studies and technical assurance reviews, and will support INPEX on the pipeline project for at least another eight months. Clough holds a 51% investment in Peritus International.

The 50:50 Clough-DORIS joint venture formed an integrated team with INPEX to oversee the detailed engineering design, procurement, fabrication, onshore commissioning, tow-to-site, and offshore hook-up of the central processing facility, as well as the floating production, storage and offloading vessel for the Ichthys project. Clough and DORIS Engineering look forward to the challenge of this project. During the fabrication phase of the project, a 300-strong team of engineers will be employed by the joint venture. The project will have an estimated 1,000 jobs to fill during construction, which is due to begin in the first quarter of next year.

The Ichthys LNG production plant will have a 40-year lifespan, and is expected to supply the Japanese power industry with enough capacity to achieve about 10% of Japan's annual energy requirements.

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