Ichthys LNG-condensate project faces delays, cost overruns

First production from the Inpex Corp.-operated Ichthys LNG-condensate project off Western Australia with pipeline connection to an LNG plant in Darwin has been delayed by about 9 months. There also is a 10% cost overrun over original estimates.

Inpex says the project has been delayed from yearend 2016, when it was originally expected to come on stream, to third-quarter 2017.

The company said the project was 74% complete as of June, but the revised start-up will increase the project investment by a maximum of 10%. This would bring the earlier $34-billion cost estimate up to $37.4 billion.

On the plus side, a recent technical evaluation of the whole LNG production system has prompted Inpex to increase the LNG production capacity to 8.9 million tonnes/year from 8.4 million tpy.

The updated schedule also reflects the expectation of a shortened timeframe between the on-stream date and the point where stable optimum production is reached.

All LNG initially planned to be produced has been sold. About 70% will go to Japan.

Inpex holds 62.245% interest in Ichthys.