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Highlights from the development phase and operational debut of the Ichthys LNG project in Australia

CPC embarks on the acquisition of upstream assets abroad to raise the ratio of self-owned items in its resources mix

Jan 15, 2018

CPC Corporation, Taiwan (CPC) began negotiating this contract for long-term LNG procurement from INPEX IN 2010. Its complex structure and the huge investment entailed meant that it took the company task force took more than 4 years to settle the terms for CPC’s participation in the project. The outcome, on 18 November 2014, was the acquisition by CPC of a 2.625% share of the Ichthys equity – the company’s second LNG project joint venture in Australia, after picking up 5% of the equity in Shell’s Prelude FLNG in 2013.

 

Arrival of the first shipment from Ichthys at CPC’s Yongan LNG receiving terminal in southern Taiwan on November 26, 2018

The operational debut of the Ichthys project was held in Darwin, the capital of Australia’s Northern Territory (NT) state, from November 15 - 16, 2018. There for CPC at the event were Michael Chang (Chang Min), CEO of the Exploration & Production Business Division and Jane Liao (Liao Hui-chen), CEO of the Natural Gas Business Division – respectively representing the company’s interest as both an upstream JV partner and downstream LNG buyer. On the second day, those attending the event had a guided tour of the Darwin Onshore Natural Gas Liquefaction Plant, a facility occupying some 170 hectares at the northern end of the NT’s Middle Arm Peninsula; their visit took in the plant’s key facilities as well as the two loading docks. The LNG tanker Pacific Breeze was the first ship to load that day, marking the effective start of the 15-year procurement contract between CPC’s Natural Gas Business Division and INPEX. Everyone viewing the Pacific Breeze from close up found both the ship and the occasion impressive and exciting - a key milestone on this company’s journey towards energy source self-sufficiency. In that context, it also marked a big early step by the Exploration & Production Business Division towards raising the size, quality and profitability of CPC’s overseas upstream assets and raising also the level of self-owned energy sources within the totality. After loading, it took Pacific Breeze just eight days sailing to reach CPC’s Yongan LNG receiving terminal near Kaohsiung in southern Taiwan, where it arrived on November 26 to a ceremonial welcome.

 

To crown this landmark foreign investment: a celebratory dinner attended by the Prime Ministers of Japan and Australia

The Ichthys natural gas field – the biggest such discovery in Australia for four decades - lies under deep water about 220 km off the north-west coast. It contains an estimated 300 billion cubic meters of natural gas and over 500 million barrels of condensate. This makes it one of the world’s leading energy development programs, with production expected to last for up to 40 years; in that time, the field is expected to produce some 8.9 million tons of LNG and 1.65 million tons of liquefied petroleum gas annually, plus up to 100,000 barrels of condensate per day. Six years in the making, the Ichthys project represents an investment of US$40 billion and is Australia's largest single foreign direct investment item; moreover it may make the country the world's top LNG exporter by 2020.

 

Shinzo Abe, Prime Minister of Japan, and Scott Morrison, Prime Minister of Australia, were the two most prominent VIP guests at the gala dinner hosted by INPEX to celebrate the project’s operational debut. In their speeches, both premiers asserted that the project would further enhance the already strong bilateral economic and trade relationship between Japan and Australia.

 

The Ichthys project has created numerous job opportunities in Australia’s Northern Territory state and will continue to bring significant economic benefit nationwide for decades to come. In addition to boosting the local economy, the Ichthys operation will lend support to the development of local educational and work opportunity: the Larrakia-Ichthys LNG Foundation Trust set up by INPEX and the Larrakia Development Association on November 15 will fund educational and job creation programs for the local aboriginal people.