JAPAN’S Inpex Corporation has signed two deals for the sale of its share of liquefied natural gas to be sourced from the Prelude FLNG project off the north-west coast of Australia.
Inpex said it had signed heads of agreements with Japan’s Tokyo Electric Power Company and Japan’s Shizuoka Gas Company for the sale and purchase of LNG from Shell’s Prelude.
Inpex is the parent company of Inpex Oil & Gas Australia (IOGA) and holds a 17.5 per cent equity stake in the project.
Under the HoA, the company reached terms for IOGA’s equity portion of the project’s LNG output with TEPCO to purchase about 560,000 tonnes per annum of LNG while Shizuoka Gas will purchase approximately 7000tpa of LNG for eight years from the start of production, both using delivered ex ship trade terms.
“As all of the IOGA’s equity portion of LNG from the project will be delivered into Japan for these two Japanese utility companies, it will significantly contribute to Japan’s stable energy supply,” Inpex said.
“INPEX will continue to negotiate with TEPCO and Shizuoka Gas with regard to the finalisation and execution of the LNG sales and purchase agreements.”
The project is being developed by a subsidiary of Royal Dutch Shell utilizing FLNG technology.
Inpex said it was the first time it would sell LNG produced from an FLNG project, representing an important milestone for the company.
The project, located inBlockWA-44-L, about 475km north-northeast of Broome, off the coast of consists of the Prelude and the Concerto gas fields.
The gas fields will be developed utilising FLNG technology and will produce at least 3.6 million tonnes per annum of LNG, 400,000 tpa of LPG and about 36,000 barrels per day of condensate at peak.
Shell holds a 67.5% majority participating interest as the operator while Korea Gas Corporation holds a 10% participating interest. Taiwan’s CPC Corporation holds the remaining 5% participating interest.
Shell made the final investment decision on the project in May 2011.
The hull of the FLNG facility was floated out from a dry dock in December 2013 representing an important technology milestone.
The development of the Prelude gas field is proceeding smoothly, and is targeting a production start-up in 2017, Inpex said.