Japanese oil giant Inpex has launched front-end engineering and design (FEED) work on a Darwin base for its $25 billion Ichthys liquefied natural gas project, to all but shut the door on a return to WA. The decision to award the FEED contract to a consortium of JGC Corp, KBR and Chiyoda Corp comes six months after Inpex decided to locate Ichthys onshore operations in Darwin, rather than in the Kimberley, because of frustration at dealing with the WA approvals process. Premier Colin Barnett had retained some hope of enticing Inpex back to WA as an anchor tenant for his Kimberley LNG hub, although the start of FEED work signals the Japanese company’s desire to stick with itsDarwin option. Ichthys, which at $25 billion is Australias biggest resources project, will see gas from Inpex’s Browse Basin gas field off the Kimberley piped through an 850km subsea pipeline to Blaydin Point at Darwin, where at least two trains capable of producing eight million tonnes of LNG a year will be built. The offshore FEED contract is yet to be awarded. Inpex (76 per cent) and France’s Total (24 per cent) hope to ship the first LNG in late 2014 or early 2015. Darwin has become Australia’s second LNG hub behind the Burrup Peninsula in the Pilbara. Conoco Phillips already operates an LNG train in Darwin and Woodside Petroleum is considering the Northern Territory capital as a site for its Sunrise gas project.

Source: The West Peter Klinger