July 10, 2017 / 7:32 AM / 2 months ago

Inpex says floating unit for Australia LNG project to set sail soon

TOKYO, July 10 (Reuters) - A massive floating component for Inpex Corp’s $37 billion Ichthys liquefied natural gas (LNG) project in Australia will soon sail from the South Korean shipyard where it is being built, the Japanese company and its shipbuilder said on Monday.

Inpex and South Korea’s Daewoo Shipbuilding & Marine Engineering denied reports of technical problems in the floating production, storage and offloading (FPSO) unit.

Inpex, Japan’s biggest energy explorer, said there was no change in the latest plans to begin the first gas production and shipments from the Ichthys development by the end of next March.

The project, the first LNG development managed by a Japanese company, has been hit with delays and contract disputes.

In April, Inpex said the project’s start would be delayed by up to six months to the end of March next year, citing issues in the installation of offshore production facilities.

Inpex and Daewoo Shipbuilding said the construction of the FPSO unit was complete, after CNBC reported on the existence of a possible crack in the massive piece of equipment that processes output from the project, which includes liquid petroleum gas and condensate, an ultra-light crude oil. CNBC cited unnamed sources.

A Daewoo Shipbuilding & Marine Engineering spokesman said he was not aware of any crack, adding that the FPSO unit was set to sail away this month, although the exact timetable was yet to be set. The FPSO unit was originally scheduled to sail from South Korea by the end of last year.

An Inpex spokesman said there were no technical issues at the moment.

“We think there’s no impact from FPSO on the overall schedule of the project,” said the Inpex spokesman, who declined to be named. “All construction work on the FPSO is complete and final preparatory work and checks before departure are being carried out.”

The Inpex spokesman repeated the company’s belief that any cost overruns could be up to a few percent of the previous estimate for the project of around $37 billion.

The central processing facility (CPF), which was shipped from South Korea on April 26, was safely moored in the Ichthys field on June 22, the Inpex spokesman added.

The Department of Industry, Innovation and Science in Australia revised down its LNG export forecasts from 67.6 million tonnes to 63.8 million tonnes in the fiscal year ending in June 2018 due to delays at Ichthys, ING Research said in a note. (Reporting by Osamu Tsukimori in Tokyo and Jane Chung in Seoul; Editing by Aaron Sheldrick and Joseph Radford)

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