THE NEXT PHASE

The Ichthys LNG project is al­most com­plete, with the fin­ish­ing touches now be­ing made be­fore first pro­duc­tion be­gins next year.

The Australian Energy Review - - FRONT PAGE - El­iz­a­beth Fabri

As each day passes, the $US37 bil­lion In­pex-op­er­ated Ichthys project is mov­ing closer to pro­duc­tion, with com­mis­sion­ing well and truly un­der­way ahead of first LNG in early 2018.

AS each day passes, the In­pex-op­er­ated Ichthys LNG project moves closer to­wards start-up.

It’s been a long-road for the IN­PEX team and its con­trac­tors, but the ar­rival in the field of the semi-sub­mersible cen­tral pro­cessinig fa­cil­ity (CPF) and float­ing pro­duc­tion, stor­age and of­fload­ing fa­cil­ity (FPSO) ear­lier in the year, marked the ‘be­gin­ning of the end’ of the con­struc­tion cam­paign.

The Ichthys project was orig­i­nally sched­uled to be com­plete at the end of 2016 but was pushed back to the third quar­ter of 2017 fol­low­ing a de­tailed re­view into the de­vel­op­ment sched­ule.

On 28 April, fur­ther de­lays were an­nounced with first pro­duc­tion of con­den­sate, liq­ue­fied nat­u­ral gas (LNG) and liq­uid petroleum gas (LPG) now tar­geted early next year.

The de­lay was at­trib­uted to many fac­tors, in­clud­ing a num­ber of fi­nan­cial con­flicts be­tween IN­PEX sub­con­trac­tors over cost over­runs.

But with the dust well and truly set­tled, the Ichthys project was now more than 90 per cent com­plete.

“Con­struc­tion of the In­pex-op­er­ated Ichthys LNG Project on­shore and off­shore fa­cil­i­ties is fin­ished and the com­mis­sion­ing ac­tiv­i­ties are well un­der­way,” Ichthys project man­ag­ing di­rec­tor Louis Bon said.

“The suc­cess of the Ichthys LNG Project to date is tes­ta­ment to the tens of thou­sands of peo­ple around the globe who have put their will power, col­lab­o­ra­tion and tech­ni­cal skills to work in mak­ing the project a re­al­ity.”

About 12,000 peo­ple are cur­rently work­ing on the project in Aus­tralia; in­clud­ing on­shore and off­shore, bring­ing all of the fa­cil­i­ties on­line, safely and re­li­ably in readi­ness for first gas.

Com­mis­sion­ing be­gins

Trav­el­ling more than 5600km from ship­yards in South Korea, the project's cen­tral pro­cess­ing fa­cil­ity Ichthys Ex­plorer – the world’s largest semisub­mersible plat­form – ar­rived in the Browse Basin in late May, fol­lowed by the Ichthys Ven­turer FPSO in Au­gust.

The mas­sive off­shore fa­cil­i­ties were now safely moored in the 250m deep wa­ters of the Ichthys Field, with hook-up and com­mis­sion­ing work now in full swing.

Mr Bon said the safe and ef­fi­cient moor­ing of both ves­sels her­alded “an­other suc­cess­ful mile­stone” for the project.

“Com­plet­ing the com­plex oper­a­tion of con­nect­ing 49 pre-in­stalled moor­ing chains, weigh­ing more than 40,000 tonnes, from the seabed to the CPF and FPSO is tes­ta­ment to the well-co­or­di­nated work of our per­son­nel,” Mr Bon said.

An as­so­ci­ated LNG car­rier, the Pa­cific Breeze, which will sup­ply LNG from the project to a cus­tomer in Tai­wan was named in a cer­e­mony at Kawasaki Heavy In­dus­tries’ (KHI) Sakaide Works in Ka­gawa Pre­fec­ture, Ja­pan, where con­struc­tion was re­cently com­pleted.

The Gas Ex­port Pipe­line (GEP) is also in a state of readi­ness for op­er­a­tional start up, while the drilling of pro­duc­tion wells are on sched­ule, with suf­fi­cient wells now drilled to sup­port first pro­duc­tion.

On­shore progress

IN­PEX and its con­trac­tors were also busy fin­ish­ing off on­shore in­fra­struc­ture at Bladin Point, Dar­win.

Two of the big­gest chal­lenges faced this year were with­out doubt the com­ple­tion of the four cryo­genic tanks, (2 LNG and 2 LPG) and the com­bined cy­cle power plant (CCPP), which came to a halt ear­lier in the year when work­ers were stood down in the heat of a sub­con­trac­tor dis­pute.

In Jan­uary, CIMIC sub­sidiary UGL and its joint ven­ture part­ner CH2M pulled the plug on its $550 mil­lion Ichthys power plant con­tract with JKC Aus­tralia LNG for the de­sign, con­struc­tion and com­mis­sion­ing of the CCPP.

In March a sec­ond con­tract row fol­lowed, this time be­tween Ichthys Project sub­con­trac­tors Laing O'rourke and Kawasaki Heavy In­dus­tries (KHI), over the con­struc­tion of the cryo­genic LNG tanks.

Wa-based en­gi­neer­ing firm Mon­adelp­hous Group, which al­ready held a sep­a­rate con­tract for the project, was hired by JKC to help de­liver the CCPP, and by Kawasaki Heavy In­dus­tries to com­plete work on cryo­genic tanks.

In mid-oc­to­ber, IN­PEX said the con­struc­tion and com­mis­sion­ing of the on­shore fa­cil­i­ties was “pro­gress­ing well”, with the on­shore plant be­ing pro­gres­sively handed over to IN­PEX on­shore op­er­a­tions staff.

In a Sep­tem­ber news­let­ter, the com­pany stated one of the fi­nal steps in con­struc­tion of the LNG stor­age tanks was com­pleted, with the in­stal­la­tion of the cryo­genic pumps in LNG Tank 1.

JKC tanks project man­ager Antony Bean said it was ex­cit­ing to see the pumps be­ing in­stalled.

“con­struc­tion of the in­pex-op­er­ated ichthys LNG Project on­shore and off­shore fa­cil­i­ties is fin­ished and the com­mis­sion­ing ac­tiv­i­ties are well un­der­way.”

“The pumps are crit­i­cal to the oper­a­tion of the tanks and the plant, and are al­ways in­stalled in the fi­nal stages of the tank’s con­struc­tion so that they can be safely pre­served be­fore the tank goes into cooldown,” Mr Bean said.

“The pumps are ba­si­cally a gi­ant ver­sion of a sump pump you would find at the lo­cal hard­ware store, ex­cept they op­er­ate in LNG at mi­nus 161 de­grees Cel­sius.

“A jib crane was used to lower the pumps into a pump col­umn at roof level and down into the tanks.”

There are three pumps in each tank, and once op­er­a­tional, each pump will be able to shift about two mil­lion litres of LNG per hour.

An IN­PEX team was also now oc­cu­py­ing the re­cently opened op­er­a­tions com­plex at Bladin Point, which is made up of 20 build­ings, in­clud­ing a lab­o­ra­tory, cen­tral con­trol build­ing, work­shops, ware­houses and ad­min­is­tra­tion fa­cil­i­ties.

The next phase: pro­duc­tion

When fully op­er­a­tional, the Ichthys project will pro­duce up to 8.9 mil­lion tonnes (mt) of LNG and about 1.65 mt of LPG per year, along with 100,000 bar­rels of con­den­sate per day at peak.

In July an eco­nomic im­pact as­sess­ment re­port by ACIL Allen Con­sult­ing, com­mis­sioned by IN­PEX, ex­am­ined the project’s con­tri­bu­tion to the North­ern Ter­ri­tory, WA and Com­mon­wealth economies since con­struc­tion be­gan in 2012 through to 2050.

It found $5.8 bil­lion of Aus­tralian LNG, LPG and con­den­sate ex­ports would be de­rived from the project each year across the study pe­riod, $190bn in ad­di­tional GDP gen­er­ated, and $73bn in tax rev­enue for State and Fed­eral Gov­ern­ments in Aus­tralia; an av­er­age of $1.9bn per an­num.

IN­PEX said Aus­trala is a core re­gion for the com­pany, with Ichthys de­signed and built with ex­pan­sion and longevity in mind, ca­pac­ity for an ad­di­tional four pro­cess­ing trains at Bladin Point, and five tie in points across the gas ex­port pipe­line.

The com­pany also main­tains in­ter­ests in 12 ex­plo­ration blocks in the Browse Basin (it cur­rently op­er­ated six), and has an ex­plo­ration in­ter­est in the Bee­taloo Basin in the North­ern Ter­ri­tory, sig­nalling fu­ture growth op­por­tu­ni­ties.

“With an op­er­a­tional life of more than 40 years, the In­pex-op­er­ated Ichthys LNG Project has and will con­tinue to pro­vide sub­stan­tial con­tri­bu­tions to Aus­tralia through a range of eco­nomic, em­ploy­ment and other ben­e­fits for gen­er­a­tions to come,” Mr Bon said.

All im­ages: IN­PEX. Photography: Serge Prakhov.

The FPSO has ar­rived in the Ichthys field.

The Ichthys project was now more than 90 per cent com­plete.

Photography: Serge Prakhov.

The CPF ar­riv­ing in Aus­tralian wa­ters.

The FPSO leav­ing its ship­yard in South Korea ear­lier this year.

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