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 LNG 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 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 Project is a world-class project to develop the gas and condensate eld discovered in the Browse Basin approximately 220 kilometres off the north-west coast of Western Australia. It is being steered forward by the Ichthys Joint Venture of INPEX with major participant Total and Tokyo Gas, Osaka Gas, Chubu Electric and Toho Gas. This multi-billion dollar project will be ranked among the largest gas processing developments in the world. The Project will deliver signicant social and economic benets to the Northern Territory and wider Australia. Ichthys onshore facilities plan Ichthys Project Ichthys Project Securing the Future 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 eld is relatively shallow, averaging 250 metres. The Ichthys Field contains resource estimates of more than 12 trillion cubic feet of gas. The eld also contains the largest discovery of hydrocarbon liquid in Australia in 40 years, estimated at more than 500 million barrels of condensate. Ichthys Project The Ichthys 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 eld had promising resources of natural gas and condensate. In September 2008, Darwin was announced as the preferred onshore location for the Ichthys LNG plant. INPEX made its nal investment decision on the Ichthys Project in January 2012. In March of the same year, two production licences were granted over Ichthys Field. 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 eld. Biggest liquids nd since Bass Strait Massive steel chains will secure the oating CPF to the seabed The CPF will be the biggest semi-submersible platform ever built 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 eld, will be connected to the CPF by a network of owlines. Offshore Facilities Plan of the offshore facilities at the Ichthys Field PIPELINE FACTS 1.2 million tonnes of concrete coated pipeline (690 000 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 fth 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. 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 690 000 tonnes of steel. 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 The Ichthys FPSO will be built to hold more than one million barrels of condensate STEP 3 STEP 5 STEP 1 STEP 2 STEP 4 Business ow (image) Oil and Natural Gas Business The business activities of the oil industry can be envisioned as the ow of a river. The upstream consists of the development and production of oil and natural gas. The midstream is where products are transported. The downstream refers to rening and sales. Our mainstay business is to handle operations in the upstream including discovery, drilling, collecting and selling crude oil and natural gas, which exists underground. As shown in the business ow below, business activities in the upstream can be further classied into the acquisition of blocks, exploration, appraisal, development and production and sales. Acquisition of Blocks Exploration Appraisal Development Production and Sales Investment for further exploration, purchase of assets, etc. (Expansion of reserves and production volume) We collect extensive information on laws and country risks related to areas in which oil and natural gas are expected to exist. We then apply and bid for mining rights and/or exploration and development rights, and entered into a contract for exploration and development. 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. 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. 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. 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. Offshore geophysical survey Satellite Offshore drilling rig (platform) Onshore rig LNG tanker LNG receiving terminal Consumer demand 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 black), specic gravity, viscosity and amount of impurities. Samples of crude oil and condensate Source rock Reservoir rock Cap rock Oil/gas Thermoforming of organic matter Heat/pressure Contracts with government of oil-producing countries Contracts can mainly be divided into concession agreements and production sharing contracts. Both contracts normally contain a commitment for required exploration work in order to locate oil and natural gas. Geophysical surveys We investigate underground tectonics such as the hardness and concentration of rocks that form the layers of geophysical exploration. Production test Oil or natural gas is produced in a test to conrm if there is a sufcient amount for commercialization. Rening/treatment of natural gas After separating oil and removing impurities (e.g., carbon gas, hydrogen), we ship natural gas that can be used as a product. Drilling of production wells We drill a well deep into the ground while joining individual pipes of about 10 meters in length. The tip of the pipe is equipped with a special drill known as a bit. The bit drills through hard rock and digs into the ground. High pressure separator Refrigeration unit To pipeline 1 2 3 Christmas tree CO Water, oil Water, oil, sand CO separator B u s i n e s s
O v e r v i e w 028 INPEX CORPORATION Annual Report 2011 029 INPEX CORPORATION Annual Report 2011 Liqueed Natural Gas Liqueed natural gas (LNG) is gas that has been cooled to liquid form, reducing its volume and making it easier to transport. LNG is clear, odourless and non-toxic. It is increasingly used as a domestic fuel and provides cleaner energy than that produced by coal red power stations as it emits less carbon dioxide over its life cycle from production to end use. Liqueed Petroleum Gas 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. Condensate Subsurface gas reservoirs contain hydrocarbon uids at very high pressures and temperatures. When this pressure is released through the drilling of wells, these uids are brought to the surface with the gas through production wells. The uids then naturally condense into a liquid called condensate which is a light oil that can be rened into petroleum products. The Ichthys Project will produce an estimated 100 000 barrels of condensate a day at peak. 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. The LNG Cycle 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 4000 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 740 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. Gas buyers About 70% of Ichthys LNG will be exported to the Japanese market. Gas will also be sold to Taiwan. 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. At INPEX one of our values 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. An illustration of a LNG carrier 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. Onshore Facilities Shipping LNG carriers are large clean ships, with heavily insulated tanks to keep the LNG cool. The carriers 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. INPEX Level 22, 100 St Georges Tce Perth WA 6000 Phone: 1800 705 010 Email: info @ ichthysproject.com www.inpex.com.au The Ichthys Project is operated by INPEX in joint venture with major participant Total and Tokyo Gas, Osaka Gas, Chubu Electric and Toho Gas Level 8, Mitchell Centre 59 Mitchell Street Darwin NT 0800