Ichthys LNG Project

Ichthys LNG onshore facilities plan

Ichthys Lng Securing the Future

KeY Facts
The Ichthys Field represents the largest discovery of hydrocarbon liquids in Australia in 40 years, estimated at more than 500 million barrels (or 80 billion litres). The onshore Ichthys gas processing plant in Darwin will be like a giant refrigeration unit, cooling the gas to its liquid form (liqueed natural gas or LNG) which occupies just one 600th of the space occupied by the gaseous form, making it easier to transport. Australia is expected to become the worlds rst or second ranked LNG exporting country by 2020. The Ichthys LNG Project is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of liqueed petroleum gas (LPG) per annum, along with approximately 100,000 barrels of condensate per day at peak.

The Ichthys LNG Project is a world-class project to develop the gas and condensate eld discovered by INPEX in the Browse Basin approximately 220 kilometres off the northwest coast of Western Australia. It is being steered forward by the Ichthys Joint Venture of INPEX of Japan and Total of France. This multi-billion dollar project will be ranked among the largest gas processing developments in the world. The Ichthys Field contains resource estimates of more than 12 trillion cubic feet of gas. This is around 13 times the amount of gas Australia uses each year. The Field also contains the largest discovery of hydrocarbon liquid in Australia in 40 years, estimated at more than 500 million barrels of condensate.

and Natural Gas Business

What is oil and natural gas?

Both oil and natural gas are types of organic matter (hydrocarbons) formed from a combination of carbon and hydrogen. Oil is a chemical compound in which large numbers of carbon molecules and hydrogen molecules are joined together. Under normal conditions (one atmosphere, which is about 15 pounds per square inch; conditions suitable for human life), oil is a liquid. Conversely, natural gas is a gas under normal conditions. Although there are differences between the properties of liquid and gas, both burn well. The oil and gas generated deep underground have a lighter specic gravity than the water and soil in geological layers and therefore rise upward over a period of many years. However, when contacting high-density geological layers through which they cannot pass, the oil and gas stop rising and form an oil eld or a gas eld. Depending on the excavation site, crude oil and natural gas exhibit a variety of differences in terms of color (from colorless and transparent to Samples of crude oil and condensate black), specic gravity, viscosity and amount of impurities.

iness activities of the oil industry can be envisioned as the ow of a river. The m consists of the development and production of oil and natural gas. The midstream e products are transported. The downstream refers to rening and sales. Our y business is to handle operations in the upstream including discovery, drilling, ng and selling crude oil and natural gas, which exists underground. As shown in the s ow below, business activities in the upstream can be further classied into the ion of blocks, exploration, appraisal, development and production and sales.

The LNG Cycle

Satellite

Oil/gas
Cap rock Reservoir rock

Thermoforming of organic matter

Heat/pressure

Source rock

Offshore drilling rig (platform)

Onshore rig

Consumer demand LNG tanker

Offshore geophysical survey

LNG receiving terminal

ess ow (image)

STEP 2

STEP 3

STEP 4

STEP 5

uisition of ks

Exploration
In addition to terrestrial geological surveys, we utilize geophysical surveys conducted through aerial photographs, satellite images and seismic waves in order to assess the potential subsurface accumulations of oil and natural gas. Furthermore, we drill exploratory wells in order to conrm the presence of oil and gas elds.

Appraisal
Once the presence of oil and natural gas has been conrmed through exploration activities, we drill an appraisal well to assess the extent of the oil and gas elds. We conduct a production test and evaluate the amount of reserves. In addition, we make comprehensive judgments regarding the commercial viability of the elds. For example, we examine protability and create development plans.

Development
We drill production wells for the production of oil and natural gas. We also construct processing facilities to separate oil and gas, and remove impurities and production, and shipping facilities such as a pipeline to transport oil and gas.

Production and Sales

We perform production and operation management such as rening/ treatment to create products from the oil and natural gas excavated from the production wells. We also perform marketing and sales for the produced crude oil, condensate, LPG, natural gas and LNG.

ct extensive information nd country risks related to which oil and natural gas are to exist. We then apply and ining rights and/or exploration lopment rights, and entered ntract for exploration and ment.

Liqueed Natural Gas

Condensate

Investment for further exploration, purchase of assets, etc.

(Expansion of reserves and production volume)

s with government of ucing countries

an mainly be divided into concession s and production sharing contracts. acts normally contain a commitment d exploration work in order to locate ural gas.

RPORATION Annual Report 2011

Liqueed natural gas (LNG) is gas that has been cooled Subsurface gas reservoirs contain hydrocarbon uids to liquid form, reducing its volume and making it easier at very high pressures and temperatures. When this to transport. LNG is clear, odourless and non-toxic. pressure is released through the drilling of wells, these Geophysical surveys Production test Drilling of production wells Rening/treatment of natural gas We investigate underground tectonics such as Oil or natural gas is produced in a test to drill a well deep into the ground while After separating oil and removing impurities It is increasingly used as a domestic fuel and provides We uids are brought to the surface with the gas through the hardness and concentration of rocks that conrm if there is a sufcient amount for joining individual pipes of about 10 meters in (e.g., carbon gas, hydrogen), we ship natural form the layers of geophysical exploration. commercialization. length. The tip of the pipe is equipped with gas that can be used as a product. special drill known as a bit. The bit drills cleaner energy than that produced by coal red power a production wells. through hard rock and digs into the ground. stations as it emits less carbon dioxide over its life cycle The uids then naturally condense into a liquid called from production to end use. condensate which is a light oil that can be rened into 1 2 3 petroleum products. The Ichthys Project will produce an Liqueed Petroleum Gas estimated 100,000 barrels of condensate aCORPORATION day at peak. INPEX Annual Report 2011
Christmas tree
To pipeline

High pressure separator

Refrigeration unit

CO separator

Water, oil, sand

CO

Water, oil

029

LPG, or liqueed petroleum gas, is extracted from natural gas. It consists predominantly of propane and butane but may contain small amounts of other related compounds. LPG is colourless and odourless. At normal temperature, LPG is a gas. When subjected to modest pressure or cooling, it transforms into a liquid so it can be easily transported. LPG is used domestically as a gas to cook with (e.g. for barbecues), to heat water, and to run cars. Its main commercial uses are in agriculture, industry, transportation and power generation. The Ichthys Project is expected to produce 1.6 million tonnes of LPGs per annum. They will be produced separately as propane and butane.

Ichthys condensate is a low-density, fuel with similar qualities to light diesel and is generally straw coloured. Because Ichthys condensate is a light product, if released into water a high proportion of the condensate (7080%) would evaporate within the rst day of release.

Business Overview

Ichthys LNG Project

The Ichthys LNG Project had its origins in 1998 when INPEX acquired the exploration permit covering what is now known as the Ichthys Field in the Browse Basin off the coast of Western Australia.
In 2000 and 2001 INPEX drilled three exploratory wells and conrmed that the Field had promising resources of natural gas and condensate. In 2006 INPEX transferred a 24% participating interest in the Project to Total, forming a strong joint venture to make the Ichthys Project a reality. INPEX has had a long-standing relationship with Total elsewhere in the world. Total has a wealth of experience and expertise in LNG plant design, construction and operation. In September 2008, Darwin was announced as the preferred onshore location for the Ichthys gas processing plant. The Ichthys LNG plant at Blaydin Point on Middle Arm Peninsula in Darwin Harbour is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPGs (propane and butane) per annum, along with 15 000 barrels of condensate per day at peak. The greater part of the condensate, some 85 000 barrels per day at peak, will be processed offshore and exported directly from the Field.

Biggest liquids nd since Bass Strait

The Browse Basin contains some of Australias largest gas and condensate elds and covers approximately 140,000 square kilometres. The Ichthys Field is located in the Browse Basin approximately 220 km off the coast of Western Australia and 820 kilometres south-west of Darwin. It covers an area of around 800 square kilometres and is made up of two reservoirs, Brewster and Plover. The water depth in the Field is relatively shallow, averaging 250 metres. The Ichthys Field contains resource estimates of more than 12 trillion cubic feet of gas. This is around 13 times the amount of gas Australia uses each year. The Field also contains the largest discovery of hydrocarbon liquid in Australia in 40 years, estimated at more than 500 million barrels of condensate.

Plan of the offshore facilities at the Ichthys Field

Offshore Facilities
Central processing facility
The Projects central processing facility (CPF) will gather the natural gas and condensate from the elds subsea wells in accordance with the strictest environmental and safety conditions. The gas will undergo initial processing at the CPF to extract condensate and water, making the gas suitable for transmission through the gas export pipeline. A proportion of the condensate will be pumped with the gas to Darwin but the bulk of it will be transferred from the CPF to the oating production, storage and offtake vessel (FPSO) for offshore processing. At 110 by 110 metres, the Ichthys CPF will be the biggest semi-submersible platform ever built and the rst in Australian waters. It will include accommodation for 150 personnel and a helipad. It will be permanently secured by 28 massive steel chains to moorings in the seabed to withstand the extreme weather conditions often experienced in Australias tropical north. The subsea production system, which will require approximately 50 wells over the 40 year life of the Field, will be connected to the CPF by a network of owlines.

The CPF will be the biggest semi-submersible platform ever built

Massive steel chains will secure the oating CPF to the seabed

Pipeline to Darwin
Subsea gas pipelines are of high quality carbon-steel, coated externally with anti-corrosion materials and concrete to provide stability. They lie on the seabed and in areas of high ship trafc are protected by rock armour or buried. The Ichthys pipeline will deliver the gas from the CPF to the onshore processing plant at Blaydin Point in Darwin. It will be marked clearly on all navigation maps. With an offshore component of 883 kilometres (and a further 6 kilometres onshore), the Ichthys pipeline will be the largest offshore pipeline in the southern hemisphere, and one of the longest subsea pipelines ever built. The pipeline will use 750,000 tonnes of steel, which is the equivalent of 15 Sydney Harbour Bridges or 93 Eiffel Towers. In Darwin Harbour, from approximately 15 kilometres from the shore crossing near Blaydin Point, the pipeline will be placed in a trench and covered with rock for added protection. This part of the pipeline will become an articial reef just like the existing BayuUndan pipeline which carries gas from the BayuUndan Field to the Darwin LNG plant at Wickham Point.
The pipeline in Darwin Harbour will become an articial reef

Pipeline Facts
1.5 million tonnes of concrete coated pipeline (750 000 tonnes of steel). Two years to manufacture 75 000 joints and coat with concrete and one year to install. More than 600 personnel will be required on the pipelay barge during the pipeline construction phase. It will be the longest offshore gas pipeline in the southern hemisphere. It will be the fourth longest offshore gas pipeline in the world.

Floating production, storage and offtake vessel

The oating production, storage and offtake (FPSO) vessel is an offshore facility, stationed about 3.5 kilometres from the CPF, that further processes the condensate, ensuring that water and other impurities are removed. Like the CPF, the FPSO is secured by moorings chains to the seabed to withstand extreme weather conditions. The Ichthys FPSO is designed to hold more than one million barrels of condensate, which will be periodically ofoaded to shuttle tankers that take the fuel direct to market. Like the CPF, it will have the capacity to accommodate around 150 personnel.

The Ichthys FPSO will be built to hold more than one million barrels of condensate

Onshore Facilities
LNG plant in Darwin
The LNG plant is like a giant refrigerator for natural gas. Its two processing trains will cool the gas to around minus 160 degrees Celsius, transforming it into liquid to reduce its volume to one 600th of the space taken up by the gaseous form. This makes it economical to transport the LNG to market. The Ichthys LNG plant will be more than twice the size of the existing Darwin LNG plant at Wickham Point.

Employment opportunities
A small army of personnel is needed to construct and operate major gas development projects. Such projects drive local economies and attract oil and gas workers from all over the world. The Ichthys Project is no exception and is expected to create more than 3000 direct jobs at the peak of the onshore construction phase. Many more jobs will be created indirectly in the Australian community as the economy expands to meet the demand generated by this massive construction effort. Approximately 700 permanent positions will be created during the Projects operations phase to operate and maintain the offshore and onshore facilities. Personnel will include project managers, plant operators, engineers, a range of oil and gas specialists, as well as providers of catering, laundry and cleaning services.

Shipping
LNG ships are large clean tankers, with heavily insulated tanks to keep the LNG cool. The tankers will use a combination of boil-off gas from the LNG cargo and diesel fuel to power through international waters. The Ichthys Project will require three LNG tankers and one LPG tanker to export product through Darwin Harbour each week as well as one or two condensate tankers each month.

An illustration of a LNG tanker

Gas buyers
At present, Australias major LNG customers are Japan, China and South Korea, although India is an emerging market. About 70% of Ichthys LNG will be exported to the Japanese market. Ichthys condensate and LPGs will be sold on the world market. Australia is currently the worlds fth largest LNG exporter. Australia is poised to become the worlds rst or second leading LNG exporter over the next decade.
Level 22 100 St Georges Tce Perth WA 6000 Level 8, Mitchell Centre 59 Mitchell Street Darwin NT 0800

At INPEX our motto is Anzen Dai Ichi Safety Number One. This helps guide the way we think, act and promote safety. We look out for the safety of ourselves, the people we work with and the communities in which we operate.

Phone: 1800 705 010 enquiries@inpex.com.au www.inpex.com.au

The Ichthys Project is operated by INPEX in joint venture with TOTAL