Total fears Ichthys cost blowout to $US40b

The cost of Inpex's Ichthys LNG project may increase to $US40 billion, according to French oil major Total.

Total fears Ichthys cost blowout to $US40b
Contractual disputes have plagued the construction of the Ichthys LNG plant near Darwin. Source: Inpex.

This story was originally published in The West Australian on 10 February 2018 with the headline "Ichthys LNG project facing cost pressure." © Peter Milne.

The cost of the Ichthys LNG project may increase to $US40 billion, according to French oil major Total.

Reuters reported that Total chief executive Patrick Pouyanne, whose company owns 30 per cent of Ichthys, said on Thursday that the cost, now estimated at $US37 billion, could reach $US40 billion.

Ichthys operator Inpex was more optimistic about costs. Reuters reported Inpex executive Masahiro Murayama had described any further expenses as “minimal” on Thursday.

An Inpex spokeswoman in Perth said the project was proceeding safely towards start-up. “There is no change to the plan to begin production from the wellhead within the fiscal year ending March 2018, after which, products will be shipped out in sequence,” she said.

Three months ago Inpex chief executive Toshiaki Kitamura said condensate, LNG and LPG would all be produced by March. It is understood project members in Perth were told before Christmas to focus on a mid-year start-up.

For hydrocarbons to flow from a wellhead on the seabed of the Browse Basin to the plant in Darwin, two giant offshore facilities need to start up successfully, then an 890km pipeline must be filled. The intricate process of starting up the 8.9 million tonne-a-year LNG plant can then begin. It is believed Inpex is considering using temporary power generation because its power station is not ready.