Australia this week moved a step closer to becoming a real problem for Qatar on the LNG market, after the second floating production, storage, and offloading vessel for the Ichthys gas field reached its destination.
The Ichthys Venturer joins the Ichthys Explorer at the field operated by Japan’s Inpex, with the first LNG shipment from the field scheduled for next spring.
The Venturer has a capacity of 1.12 million barrels of gas condensate and will process, stabilize, and store condensate it will receive from the other FPSO, and then load it on tankers.
The Ichthys largest overseas investment by Japan, and Inpex, Reuters notes, and the company’s first foray into LNG.
The US$34-billion project will tap reserves estimated at over 12 trillion cu ft of natural gas, helping Australia take on the world leader in LNG exports, Qatar. It has run into difficulties, however, with costs rising to US$37 billion and the launch of production getting delayed by a year.
Now analysts are watching the Ichthys development closely to see if Inpex could “pull it off without any more budget blow-outs and delays,” and whether it could compete with Shell in Australian waters. Earlier this year, the Anglo-Dutch supermajor delivered the Prelude FPSO to its same-name field, in waters adjacent to the Ichthys. The US$12.6-billion development has also been running behind schedule and now first production from the world’s largest FLNG facility is set for between April and July 2018.
Who beats who to first production is important because the Prelude and the Ichthys share reserves, analysts note, so whoever starts earlier, will be effectively undermining the production of the loser.
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Inpex, however, is better placed to benefit either way: it has a minority stake in the Prelude project besides its 62.2 percent interest in Ichthys.
Australia is eyeing the top spot among LNG exporters by 2020 thanks to an investment boom estimated at US$200 billion. However, a gas shortage on the domestic market earlier this year prompted the federal government to install export controls aimed at first ensuring local energy security and then advancing the export growth strategy.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.