Critical to understand that our partner and their JP partners in a nearing completion bloated, cost over-run $34 Billion project is still profitable at these Oil prices. We likely see a full integration of JP companies as OTers and equity partners in our E/A LNG project. As foretold above by Hession.
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Total holds a 30% equity stake in the project. The other partners are:
- Inpex (66.7%)
- Tokyo Gas (1.575%)
- Osaka Gas (1.2%)
- Chubu Electric Power (0.35%)
- Toho Gas (0.42%)
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INTERVIEW-Japan's Inpex: Ichthys LNG project still above break-even-point despite oil plunge
TOKYO
Jan 9 (Reuters) - The $34 billion Ichthys liquefiednatural gas (LNG) project in Australia is still above its break-even-point despite a six-month plunge in global oil prices to around $50 a barrel, said the top executive of project operator Inpex Corp.
When Inpex made its final investment decision (FID) in 2012,Brent crude was hovering around $110 a barrel, but Inpex is not worried about the profitability of Ichthys even though global crude prices have lost more than 50 percent of their value
since June last year, Inpex President and CEO Toshiaki Kitamura said in an interview with Reuters on Friday.
"We have confidence in the project's profitability," he said, adding that oil prices have not fallen below its break-even-point. Current oil prices are within the expected range, he said, without giving any specific details.
Most Australian LNG exports are sold under long-term contracts linked to global oil prices.
The Ichthys project, which was 58 percent complete as of last September, is progressing on schedule to start production by the end of 2016, Kitamura said.
The energy boom in Australia has led to labour shortages and cost blow-outs, and there's a risk of cost-overruns, but Ichthys is in a comparatively better situation with 75 percent of the project awarded on a lump-sum basis, he said.
The Australian dollar's 15 percent weakening against the greenback and the easing in the rapid rise of Australia's labour costs since FID was made should help to keep the project on budget, he said.
The project, which is to produce 8.4 million tonnes of LNG a year, will pipe gas off westernAustralia to two LNG trains and other infrastructure near the coastal city of Darwin in Australia's Northern Territory.
Inpex, 19 percent owned by the government, has a stake of more than 62 percent in the project, with Total and several other Asian energy companies are shareholders.
When Ichthys starts production in 2016, Inpex's output is expected to jump around 50 percent from its current 400,000 barrels of oil equivalent per day (boepd), with a goal for production to hit 1 million boepd in the early 2020s.
"We expect to raise production to about 700,000 bpd by around 2020," Kitamura said, adding that in the long term, the company is interested in acquiring stakes in Mexico,Norway, Africa and South America in particular.