Australia's LNG megaproject boom enters final straight
Published by Joseph Green,
Editor
LNG Industry,
Reuters are reporting that the last massive component of Australia's US$180 billion LNG construction boom arrived on 14 August, stepping up a race between Anglo-Dutch giant Shell and Japan's Inpex to start chilling gas for export in 2018.
Company reputations are at stake, as well as first access to overlapping gas fields and Australia leapfrogging Qatar as the world's largest exporter of LNG.
The Ichthys Venturer, a FPSO facility, travelled 5600 km from a South Korean shipyard and will be moored 220 km off Western Australia to handle condensate from the Ichthys field.
Japan's top oil and gas explorer, Inpex Corp, is running Ichthys, both the country's biggest overseas investment and first LNG megaproject.
First production, due by March 2018, will be more than a year behind target. Costs have ballooned more than 10% to US$37 billion since the project's approval in 2012.
Nearby, Royal Dutch Shell's US$12.6 billion Prelude project – the world's largest FLNG facility – is also behind schedule. Shell lost out on becoming the first producer of FLNG when Malaysia's Petronas started up a smaller FLNG facility this year.
Shell's facility arrived last month.
Shell expects hook-up and commissioning to take up to 12 months, meaning start-up between April and July 2018.
Whichever project starts first will pump gas away from the other's field as the two straddle the same reservoirs. The race means more to Prelude than Ichthys, as Prelude is smaller.
Inpex also has an each-way bet: It owns 17.5% of Prelude as well as 62.2% of Ichthys.
Stumbles and contract disputes are normal for megaprojects. Chevron Corp had numerous problems with its US$54 billion Gorgon project in Western Australia when it started in 2016.
Ichthys's contractors are mired in claims from two major engineering firms, although Inpex has said those disputes will not slow the project.
Prelude and Ichthys also might see delays during the tropical cyclone season from November through April.
Wood Mackenzie expects a relatively long commissioning for Prelude due to its large scale and new technology, but sees Shell's long experience on LNG projects as an advantage.
Read the article online at: https://www.lngindustry.com/liquefaction/14082017/australias-lng-megaproject-boom-enters-final-straight/
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