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Seiya Ito says Inpex is in WA for the long haul (Attila Csaszar).

Inpex happy to call WA home

The head of Japanese company Inpex’s Australian operations says Australia remains a very attractive investment destination, and has suggested the company’s Ichthys project could be expanded when conditions are right.

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CRAIGIEBURN
I have a question for INPEX? Is it correct that the life of Ichthys gas & condensate reserves will last for 40 years? I doubt that..... The life of the Ichthys gas field (as per the gas reserves of 12.8 TCF and at annual LNG production of 8.9 Million tons) will not be 40 years. At best it will be 25 years if the reserves are 100% recoverable. Simple & direct calculation is as follow: To produce 8.9 million tons of LNG per year and 1.6 million tons of LPG, it is required a feed gas rate of 1.65 BSCF/day to the onshore plant, Hence the life of the gas reserves will be: =(12.8 )/(0.00165 x 335)=23.16 years. Providing a shut down for one month is carried out every year for maintenance. The 23 years may go down if other loses during production is considered such as flaring during unplanned shutdown, plant upset and methane loses in the nitrogen rejection unit during purification of LNG. Also, according to the condensate reserves of 550 million bbls and at condensate production of 100,000 bbls/day, the condensate production will only last for 16.5 years. It is highly likely that this investment will be a burden on INPEX and on TOTAL because at current price of 45 US dollar a barrel and at 5 US dollar per MMBTU the total revenue for the life of the Ichthys projects will not exceed 89 billion Us dollars. If operating cost is deducted and the money to pay back the lenders and the banks is taken from the total revenue then profit per year will be nothing hence this project will not deliver a good rate of return for it’s 38 billion US dollar investment. Bassam El Wazni

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