Japanese group Inpex and French oil group Total gave the go-ahead for a $34 billion liquefied natural gas export project that will see Australia overtake Qatar by 2017 as the world's top LNG exporter, mostly to Japan. The budget compared with a November 3 estimate from Total for "a little more than" $30 billion and an initial $20 billion forecast made in 2008 for Ichtys, which has reserves of 3 billion barrels of oil equivalent.
"I think we have a highly accurate cost estimate," Inpex President Toshiaki Kitamura told reporters in Tokyo on Friday. "The $34 billion capex ensures sufficient economic efficiency," he said, adding it was unlikely to increase further. An energy boom in Australia has led to labour shortages and cost blow-outs - the go-ahead means Australia will have a total of eight LNG projects under way. Total shares were up 0.7 percent at 1020 GMT, ahead of a 0.1 percent lower European oil and gas sector. Earlier, Inpex closed up 1.2 percent, in line with Japan's benchmark Nikkei index.
The green light for the 8.4 million tonne per annum (mtpa) project comes amid an LNG rush in Australia that will see its export capacity almost quadruple to nearly 80 mtpa by 2017 from 20.1 mtpa now. Inpex had delayed its final investment decision on the scheme, which will pipe gas from the Timor Sea to the coastal city of Darwin in Australia's Northern Territory, from late last year. Inpex holds a 72.805 percent stake in the project and Total has 24 percent. Tokyo Gas bought 1.575 percent on Thursday, Osaka Gas has 1.2 percent and Toho Gas 0.42 percent.
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