Australia took a further major step towards rivalling Qatar, the world’s largest LNG exporter, and significantly enhanced our already strong trading relationship with Japan with the signing of agreements in Sydney today worth $70bn in LNG export revenue to the economy.
Japan's INPEX and Total of France today secured 15 year Sales and Purchase Agreements with five Japanese power companies to supply LNG from the proposed Ichthys project in the strongest indication yet that a final investment decision on the project is likely in the near future.
The Ichthys natural gas field is one of Australia’s largest offshore gas fields. The onshore project will create over 2,000 jobs during the five year construction phase, and 300 jobs when fully operational. The offshore component will create around 1,000 jobs during construction and 400 during operations.
At today’s signing ceremony, Minister for Resources and Energy, Martin Ferguson AM MP congratulated INPEX and Total on the sales and purchase agreements,
“These agreements are a great step forward for the Ichthys project and for the Australian LNG industry,” Minister Ferguson said.
“With expected LNG output of 8.4 million tonnes per annum, the Ichthys project has the potential to significantly boost Australia's standing as a major energy supplier, create jobs particularly in the Northern Territory, significantly boost export revenues and help meet the energy needs of one our oldest, largest and most valuable LNG trading partner – Japan.
“The benefits of the Ichthys project are already being felt on the ground in Northern Territory with the official launch earlier this year of the Larrakia Trade Training Centre. This partnership between INPEX, Total and the Larrakia Development Corporation is helping to train and skill more young Australians, helping them to take advantage of the opportunities presented by the resources boom.
“Japan was a foundation investor in Australia's energy and resources sector, particularly in iron ore, coal and, in the last 25 years, LNG.
“The Ichthys project would further strengthen the close relationship between our two countries to our mutual benefit.
“Japan is the world’s largest importer of LNG, accounting for one third of the world’s LNG imports in 2010 and Japan's demand for gas has substantially increased since the tragic events of March this year.
“Australia is a proven, reliable LNG supplier and this year became the largest supplier of LNG to Japan. The sales and purchase agreements concluded today will cement this relationship and help maintain Japan's energy security.”
Subject to a positive final investment decision, the Ichthys project will represent Japan’s biggest single financial investment in Australia. It will also be the first Japanese-operated LNG project.
The Ichthys project will consist of a central processing facility, a gas export pipeline, and an onshore gas plant in Darwin. It will have the capacity to produce 8.4 million tonnes of LNG each year, about 1.6 million tonnes of LPG per year, and 100,000 barrels of condensate a day.
The project partners have expressed their commitment to sourcing goods and services from local businesses and established a specific plan to involve Indigenous businesses in the project.
Today's sales and purchase agreements with Tokyo Electric Power Company, Tokyo Gas, Kansai Electric Power Company, Osaka Gas and Kyushu Electric Power Company represent contracts to supply 4 million tonnes of LNG per annum.
In 2010-11 Australia exported 20 million tonnes of LNG and the value of those exports reached $10.5 billion. There is currently over $140 billion worth of LNG projects under construction in Australia, which when combined with the Ichthys project, have the potential to quadruple Australia's existing export capacity.