By Sarah Byrne

AUSTRALIA needs more internal competition in order for its mega projects to compete on an international level, according to INPEX Ichthys LNG project managing director Louis Bon.

Mr Bon told Oil & Gas Australia that high project costs in Australia are a result of little competition between sub-contractors who are working in a relatively closed market.

Speaking on the sidelines of the 18th International Conference & Exhibition on Liquefied Natural Gas (LNG18) in April, he also noted complex logistics and high wages as key factors in the cost of Australian projects.

“I think the high cost of Australian projects is due to the fact that you work too much in a closed environment,” he said.

Mr Bon said it was frustrating that so much work for Ichthys had to be sent for construction in other countries.

“The fact that we have to build the 5,000 tonne modules in Thailand, the Philippines and China for the plant, I think that is frustrating.”

“Some of this, but not all should be done in Australia. There should be a way to do that here.”

Mr Bon said Australia should aim to do more here and to try and do it at cheaper cost.

INPEX’s Ichthys project is 81 per cent complete and according to Mr Bon the project is on target for first production in the third quarter of 2017.

Mr Bon told an audience at LNG18 the group had finished laying the 42 inch subsea gas export pipeline and infield pipelay work.

INPEX has begun drilling production wells and has installed subsea manifolds and Christmas trees.

The installation of the riser support structure and associated equipment has also been completed, Mr Bon said.

Onshore in Darwin the project in April was more than half way through construction at Bladin Point.

During the past year, the central processing facility (CPF) was safely floated out of dry dock in Korea while the floating production, storage and offloading (FPSO) facility is also taking shape.

Mr Bon said both of these offshore facilities are set to be ready for sail away later this year, making the journey of 5,600 nautical miles from Korea to Australia.

Located about 220 kilometres offshore Western Australia, Ichthys represents the largest discovery of hydrocarbon liquids in Australia in 40 years.

The Ichthys LNG project is effectively three mega-projects rolled into one, involving some of the largest offshore facilities in the industry, a state-of-the-art onshore processing facility and an 890 kilometre pipeline uniting them for an operational life of at least 40 years.