Japan's Inpex Corp. said Friday it has made a final investment decision on Australia's Ichthys liquefied natural gas export project and that the development will cost $34-billion (U.S.), paving the way for Australia to surpass Qatar as the world's top exporter of the fuel by 2017.
The 8.4-million-tonne-per-annum project's price tag is 70 per cent more than Inpex's original estimate of $20-billion.
Inpex holds a 72.8-per-cent stake in the project, French energy company Total has 24 per cent, while Tokyo Gas bought just over 1.5 per cent, Osaka Gas purchased 1.2 per cent and Toho Gas 0.42 per cent.
Inpex 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 due to year-end time constraints.
The decision comes in the midst of an LNG rush in Australia that will see the country's export capacity almost quadruple by 2017 from 20.1 million tonnes per annum currently to nearly 80.
With Inpex's Ichthys project, Australia will have a total of eight LNG projects under way, a situation which has already led to cost blow-outs and labour shortages.
Most of the LNG produced at the plant will be shipped to Japan, where LNG demand has risen sharply since the March, 2011, tsunami that knocked several nuclear reactors offline.
In December, Inpex signed around $70-billion worth of LNG sales agreements with a consortium of five Japanese utilities including Tokyo Electric Power Co., Tokyo Gas Co., Osaka Gas, Kyushu Electric Power Co. and Kansai Electric Power Co., which will buy a total 4 million tonnes per year for 15 years from Ichthys.
Chubu Electric, Toho Gas, and Taiwan's CPC Corp. have also committed to buy 0.49 million tonnes per annum, 0.28 and 1.75 respectively, from the project.
Inpex and Total will each take 0.9 million tonnes from Ichthys LNG.