Darwin steps up in global gas market

14 November 2018

INPEX's purpose-built LNG Carrier lit up at night

INPEX ships historic first LNG cargo

On 22 October 2018 the Northern Territory (NT) Government’s vision for the Territory to be a world-class gas production, manufacturing and services hub by 2030, moved a big step closer with the first shipment of liquefied natural gas (LNG) from the US$37 billion Ichthys LNG Plant in Darwin harbour.

With the delivery of Ichthys LNG into the Japanese port of Naoetsu, Ichthys gas is now fuelling the homes, industry and power grids of Japan, and will help deliver energy security for least the next 40 years.

Activity at the Ichthys plant will ramp up over the coming weeks with further LNG shipments and the commissioning of the second LNG production train. With the first liquefied petroleum gas (LPG) shipment scheduled later this month and ultimately, export of gas condensate, the value of energy exports from the NT is set to skyrocket.

Now with Ichthys, and the ConocoPhillips-operated DLNG, Darwin is home to two LNG plants and support-port to Shell’s world-first ‘Prelude’ floating LNG facility which is scheduled to commence production later this year. This puts Darwin squarely in the mix of major players in the global energy game, and the potential for further growth has never been more exciting.

The NT Government is committed to achieving its vision for a world-class gas production, manufacturing and services through its Five Point Plan to:

  1. expand the LNG export hub
  2. grow the service and supply industry
  3. establish gas based processing and manufacturing
  4. grow research, innovation and training, and
  5. contribute to national energy security.

INPEX’s first LNG shipment from Darwin highlights the first point of this plan - expand the LNG export hub. With land and infrastructure already in place at Bladin Point to enable four additional LNG production trains, the NT Government will continue to coordinate activities to enable expansion of Ichthys in coming years.

In addition, ConocoPhillips is looking to bring undeveloped offshore gas reserves into play for DLNG as the Bayu-Undan field approaches the end of its commercial life. The NT Government recently co-funded a study with proponents to assess the feasibility of an additional LNG train at DLNG. The study found that Darwin was globally competitive and the government will continue to work with proponents to bring this opportunity to fruition.

The emergence of Darwin as an LNG hub has been based on large-scale offshore reserves that have underwritten the Darwin LNG, Ichthys and Prelude projects, and new reserves are needed to enable expansion. However, the key to expansion may not lie offshore but in emerging opportunities onshore in the NT. Lying approximately 600km south of Darwin, the Beetaloo Sub-basin has long been considered a highly prospective petroleum play. The extensive basin covers over 6,000 square kilometres and is largely underexplored. But it promises a resource of globally significant proportions.

The NT Government recently confirmed estimates of over 500 trillion cubic feet of gas-in-place in just one of multiple layers of shale in the Beetaloo Sub-basin. To put this into context, Australia’s total annual gas demand is 1.4 trillion cubic feet and the proven reserve of the gas field supplying the Ichthys Project is 12.8 trillion cubic feet. And it promises a competitive, reliable supply of gas in plentiful volumes that promise to spark an investment and gas industry development surge in the NT.

The NT Government has embraced the Developing the North agenda and is partnering with the Australian Government to collaboratively develop the NT gas industry. This approach aims to deliver an investor-friendly environment with strategic approval processes for onshore shale developments, designated easements for gas pipeline networks and support infrastructure, and enhanced transport infrastructure. Importantly, both governments aim to optimise infrastructure efficiencies through potential public-private partnerships and common-user facilities to deliver NT gas at competitive rates to both domestic and global markets.

And it is the production and delivery of globally competitive, reliable supplies of natural gas on a world scale that will elevate the NT as the stand-out destination for investment in the gas industry.

Find out more about an exciting era of growth and opportunity as the Territory grows in stature and influence on the global energy stage on The Territory website.

Written by Sean Reddan, Principal Industry Development Officer, Strategic Oil and Gas Industry Development, Northern Australia Development and Trade.

Image: Mission accomplished - INPEX’s purpose-built LNG Carrier, Pacific Breeze eases off Bladin Point in Darwin Harbour with the first shipment of Ichthys LNG bound for Japan on 22 October 2018. Image courtesy INPEX.