Power Station for Inpex's Delayed Ichthys Project Remains on Schedule

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Researched by Industrial Info Resources (Sugar Land, Texas)--Inpex Corporation (TYO:1605) (Tokyo, Japan) is Japan's largest petroleum company and manages at least 70 projects in 26 countries. In 2008, the company ranked No. 5 in BusinessWeek's Top 50 Best-Performing Asian Companies. In recent years, Inpex has been heavily involved in the development of offshore gas fields in Oceania, the Abadi project and the Ichthys liquefied natural gas (LNG) project.

The Ichthys Project, to be developed in a gas field near the Maret Islands off the coast of Western Australia, will be the world's largest floating liquefied natural gas (LNG) production platform once it is completed. Around 8 million metric tons of LNG per year is expected to be pulled from the gas field. LNG will then be directed 850 kilometers east to an onshore processing facility at Blaydin Point on the Darwin Harbor in the Northern Territory, which will handle the LNG in two trains. Front end engineering and design (FEED) of the onshore processing facility is currently being carried out by a joint venture of JGC Corporation (TYO:1963) (Yokohama, Japan), Chiyoda Corporation (TYO:6366) (Tokyo, Japan), and KBR Incorporated (NYSE:KBR) (Houston, Texas).

JKC Joint Venture (Yokohama) is also responsible for the FEED of the $15 billion LNG-processing facility's power station. Originally, the construction schedule of the power station was set to echo that of the processing facility, whose completion was set for the third quarter of 2015. In May, Inpex announced that it was delaying its final decision on the $38 billion Ichthys project due to financial uncertainty, primarily caused by the global recession. Completion of the LNG-processing facility has since been pushed back to late 2016. However, the power plant is still on track for completion in 2015. Inpex is hoping the delay will provide ample time for FEED and further feasibility studies, before it makes its final decision during the fourth quarter of next year. The cogeneration power station is currently sketched to produce between 400 and 500 megawatts for the processing facility.

To be such a large natural gas consumer, Japan has relatively little in terms of a sizeable natural gas pipeline system. Creating such a system would be nearly impossible due the country's mountainous terrain. Japan has more than 40 terminals that receive some 3 trillion cubic feet of LNG per year, with most situated in Tokyo, Osaka and Nagoya. Inpex is currently in the midst of building new terminals, one to be located at the Port of Naoetsu in the Niigata prefecture, approximately 250 miles northeast of Tokyo on the Sea of Japan. Inpex is hoping to boost Japan's natural gas supply chain and fuel it with a good portion of LNG produced by the Ichthys Project, starting in 2016.

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