LNG

Australia’s left-wing government has rowed back from starting to ban hydrocarbons and putting the nation on a path to economic and energy suicide by on July 23 deciding to issue exploration and production licences for natural gas for the East, Southeast and West coast markets.

McDermott, the US engineering and construction company, and energy and LNG technology company Baker Hughes, have completed the installation of subsea infrastructure at the Ichthys gas field in northern Australia linked to the liquefaction plant operated by Japan’s Inpex Corp.

The contract was awarded to a McDermott and Baker Hughes consortium in 2019 by Inpex, the operator of the Ichthys project at Badin Point near Darwin in Australia’s Northern Territory.

Ichthys LNG has as additional shareholders French major TotalEnergies and the Australian subsidiaries of CPC Corp. of Taiwan, and Japanese utilities an importers Tokyo Gas, Osaka Gas, Kansai Electric Power, JERA and Toho Gas.

Key LNG producer

Ichthys LNG has nameplate capacity of 9.3 million tonnes per annum LNG and 1.65 million tonnes of liquefied petroleum gas per annum along with more than 100,000 barrels of condensate per day at peak output.

The McDermott-Baker Hughes subsea infrastructure development project included engineering, procurement, construction and installation (EPCI) of umbilicals, risers and flowlines (URF), a subsea production system comprised of a new 7-inch (approximately 18 centimetres) vertical Ichthys LNG planthristmas tree (VXT) system.

McDermotts said this is all part of forming a subsea well gathering system (GS4) tied back to the existing the “Ichthys Explorer “central processing facility.

The consortium’s scope of work also included an in-fill URF EPCI involving the development of new subsea wells tied-in to the existing gathering systems.

“The McDermott and Baker Hughes partnership has been marked by resilience and adaptability, guided by our firm commitment to deliver for the INPEX-operated Ichthys LNG and Australia,” said Mahesh Swaminathan, McDermott’s Senior Vice President, Subsea and Floating Facilities.

Engineering capabilities

“Together, leveraging McDermott’s unique end-to-end EPCI capabilities and Baker Hughes’s subsea development solutions, we navigated project complexities and overcame the unique challenges posed by the pandemic,” Swaminathan explained.

“Our hard work paid off, and I would like to thank our teams in Perth (Australia), Batam (Indonesia), and beyond, whose collective efforts enabled the safe completion of this important work scope,” Swaminathan added.

Romain Chambault, Baker Hughes Senior Vice President, Subsea Projects and Services, said the completion was achieved through the successful partnership between Baker Hughes and McDermott to execute the project for Inpex.

“The amount of collaboration shown between the consortium has been truly unique and serves as an industry benchmark for the successful execution of large, complex EPCI subsea projects,” Chambault stated.

Inpex Corp., the operator of the Ichthys LNG plant in Australia and developer of the Abadi LNG project in Indonesia, said it received written approval on December 6 for the revised Plan of Development (POD) for the Indonesian Abadi joint venture and would be moving on to the front-end engineering and design phase.

UK major Shell reported much reduced third-quarter profits of $6.2 billion, lower than the $9.45Bln of profits returned in the same three months of 2022 as natural gas prices dropped, while quarterly sales of liquefied natural gas were still over 16 million tonnes.

Indonesia’s Minister of  Energy and Mineral Resources Arifin Tasrif said 68 of the country's 128 oil and gas basins remained entirely unexplored and that international energy companies would receive better terms for exploration and production in the country where the Abadi LNG project is advancing along with the Tangguh LNG expansion.

Malaysian energy company Petronas and Indonesian state-owned oil and gas company Pertamina have agreed with Shell to jointly acquire the UK company’s minority Masela natural gas block in Indonesian waters that will underpin the Abadi LNG export project in Indonesia and boost future cargo availability in the Pacific Basin.

Inpex Corp., the leading Japanese liquefied natural gas developer and operator in the Asia-Pacific region, is focusing on re-assuring shareholders and the public in Japan on the company’s safety and security by organising facility tours of the Naoetsu LNG Terminal in Joetsu City in Niigata Prefecture.

Shell has again suspended production at the “Prelude” floating LNG facility offshore northwest Australia because of an electric trip, an issue that had previously led to long shutdowns for safety investigations.

Inpex Corp., the leading Japanese energy company and operator of the Ichthys liquefied natural export plant in Australia and developer of the Abadi liquefaction project in Indonesia, reported 34 cargoes shipped in the first quarter from the Ichthys plant at Bladin Point near Darwin.

Inpex gave the figure in its first-quarter earnings when it reported a more than 60 percent surge in net income on higher volumes and prices.

The company posted a 19 percent jump in quarterly sales of 578.4 billion yen ($4.28Bln) in the first three months of 2023 versus 485.3Bln ($3.59Bln) in the 2022 quarter.

Net income for the quarter rose by 61.2 percent to 151.4Bln yen ($1.12Bln) compared with 93.9Bln yen ($695 million) in the prior-year quarter coming mainly from sales of oil, pipeline gas and LNG.

Gas prices

The average overseas natural gas sales price for Inpex increased by 11 percent to $6.73 per thousand cubic feet of gas from $6.06 per mcf.

The Inpex oil and gas assets in Japan comprise the domestic Japanese Minami-Nagaoka Gas Field in Niigata Prefecture and the Naoetsu LNG import terminal.

Inpex said average quarterly domestic natural gas prices soared to 110.67 yen per cubic metres from 65.76 yen per cubic metre in the same quarter last year.

“The company’s net sales of crude oil increased by 44.1Bln yen, or 12.4 percent, to 399.6Bln yen, and net sales of natural gas increased by 49.8Bln, or 40.2 percent, to 173.7Bln yen,” the company said.

“Sales volume of crude oil increased by 1,502 thousand barrels, or 4.3 percent, to 36,677 thousand barrels, and sales volume of natural gas increased by 2,456 million cf, or 2.0 percent, to 128,241 million cf,” Inpex added.

Inpex own a 66 percent stake the Ichthys plant in Australia’s Northern Territory and currently supplies about 10 percent of Japan’s LNG imports. The other main shareholder is TotalEnergies.

The Japanese company has also finalized a revised development plan for the Abadi LNG export project in Indonesia, a joint venture with Shell. 

Inpex submitted the new plan to Indonesian regulators in April 2023 incorporating a carbon-capture and storage component.

Inpex's venture will be located onshore Yamdena Island in the Tanimbar Island chain and use feed-gas from the Abadi gas field in the Masela Block of Indonesia's Arafura Sea.

The liquefaction and export plant could be expected to be operational by around 2030.

Inpex Corp. the leading Japanese energy company and operator of the Ichthys LNG plant in Australia and developer of the Abadi liquefaction project in Indonesia, reported a jump in earnings and operating activities.