Australia’s Ichthys LNG project is experiencing delays and cost overruns that commentators have blamed on bottlenecks at Korean shipyards.
Earlier due online in 2016, the USD34 billion project has been rescheduled for the third quarter of 2017, Inpex Corporation announced on 11 September.
While expected to go 10% over its budget, Ichthys also now has a greater forecast capacity, up 6% to 8.9 MTPA.
Within days of Inpex’s announcement, the Australian Financial Review (AFR) reported that the delays were partly due to bottlenecks at the South Korean shipyards building the project’s offshore facilities.
To exploit oil and gas fields off Western Australia, the Ichthys LNG Project involves three megaprojects: offshore facilities, an onshore processing facility, and an 889 km pipeline uniting them.
AFR added that Shell, a rival to Inpex, had lobbied Samsung Heavy Industries to prioritise its USD12 billion Prelude floating LNG vessel, which like Ichthys is destined for the Browse Basin hydrocarbon resources.
An Inpex spokesperson declined to confirm these reports to IHS Maritime.
“Certain portions of the development work had experienced delays earlier in the project,” she said.
She added that all activities were now progressing well and in line with the new schedule.
In its press release, Inpex said the project had been about 74% complete by June 2015 but its timeline had been adjusted “based on the findings of a detailed review of the project’s development schedule”.
Inpex leads the Ichthys project with a 62.2% shareholding, alongside Total (30%) and minor stakeholders CPC Corporation Taiwan, Tokyo Gas, Osaka Gas, Kansai Electric, Chubu Electric Power, and Toho Gas.
All LNG initially planned from the project has been sold. The onshore gas plant in Darwin Australia is expected to ship out 89 million tonnes of LNG and 1.6 million tonnes of LPG annually at peak.
“About 70% of the LNG is set to be supplied to Japan and this is expected to further contribute to the long-term, stable supply of energy to the country and improve Japan’s energy procurement risk management,” said Inpex President & CEO Toshiaki Kitamura.
Meanwhile, Daewoo’s delivery of a ship to produce light oil at the field for Inpex has also been delayed, allegedly due to cash flow issues at the Korean shipbuilder.
This post was sourced from IHS Maritime 360: View the original article here.