Samsung Heavy Industries says Inpex has counter-sued over Ichthys LNG central processing facility dispute

Wednesday, 09 June 2021
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Inpex Corp., the Japanese oil and gas developer and operator of the Australian Ichthys LNG export plant near Darwin, has counter-sued South Korea's Samsung Heavy Industries over a payment dispute related to the delivery of the Central Processing Facility (CPF) for the Ichthys gas field offshore northwest Australia.

SHI confirmed that the law suit had been filed by Inpex after the South Korean company had sought arbitration in April 2021 over the unpaid full CPF contract settlement.

The commissioning at the CPF was completed at the end of May 2018 and that was the last major task to be carried out by the developers in the offshore section.

However, Inpex claimed at the time that late deliveries of the CPF and other offshore equipment were among several factors that caused the delayed commercial start of the Ichthys venture for Inpex and French major Total, now called TotalEnergies.

The Ichthys feed-gas is sent to Bladin Point in the Northern Territory through a 890 kilometres-long gas pipeline.

SHI said in its claim that after the installation of the CPF it asked the Japanese company to settle the balance of the contract amounting to $116M.

But Inpex refused, saying the delayed CPF arrival and installation had caused project hold-ups.

SHI finally lodged a complaint against Inpex on April 30, 2021, with the Singapore International Arbitration Centre, seeking payment for the rest of the contract amount.

This latest Inpex lawsuit is separate from another involving the joint venture Ichthys LNG engineering consortium JKC, consisting of KBR, Chiyoda and JGC Corp.

The Ichthys project's final cost was estimated at more than US$40 billion.

This far exceeded a 2012 cost estimate of US$34Bln for the venture, which was beset by delays of almost two years.

The first shipment of LNG from liquefaction plant was finally delivered on the 30th October 2018 to the Inpex-operated Naoetsu LNG Terminal in Niigata Prefecture.

A total of 8.4 MTPA of LNG out of the almost 9 MTPA from the two-Train plant was pre-sold to Japanese utility companies Tokyo Gas, Osaka Gas, Kansai Electric Power, Jera Co. Inc. and Toho Gas. CPC Corp. of Taiwan also receives shipments.

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