Japan's Inpex Corporation and France's Total are expected to complete their procurement of LNG carriers for Ichthys LNG Project in Australia by the end of 2012. Inpex and others have taken action to choose the providers of the vessels since the end of 2011.
According to a person of the industry, several participants from Japan and other countries are entering the bids. It seems that the owners of the project plan to procure total three ships to carry LNG cargoes to Inpex, Total and Taiwan's CPC Corporation respectively.
Out of total LNG production at Ichthys project, 900,000 tonnes per year each will be taken by Inpex and Total for their own procurement and 1.75 million tonnes per annum will be sold to CPC.
The trade term, based on which LNG cargoes will be sold to CPC, had not yet been disclosed. However, it was found that the term is Ex Ship, judging from the fact that the sellers are arranging LNG carriers.
In general, it is said to take about three years before construction of a ship is completed and a LNG carrier is placed into service after starting business negotiations. Production will begin at Ichthys project in the fourth quarter of 2016. In view of the time for start up, it is too soon for Inpex and others to commence negotiations on charter agreement. However, it seems that Inpex side wants to fix the investment value earlier.
As for seven Japanese buyers, which will purchase LNG from Ichthys on FOB basis, although it has been heard that the buyers are taking action behind the scene, they are expected to officially enter into negotiations after the project owners settle charter contracts partly because there is plenty of time before the project starts up.
The five companies will form consortium to procure total 4 million tonnes per annum of LNG, consisting of 1.05 tonnes per annum by Tokyo Electric Power Company, 1.05 tonnes per annum by Tokyo Gas Co Limited, 800,000 tonnes per annum by Kansai Electric Power Company, 800,000 tonnes per annum by Osaka Gas Co Limited and 300,000 tonnes per annum by Kyushu Electric Power Company.
Of these five companies, the four companies had shown their interest in procurement of LNG tankers at the early stage. But total capacity of four vessel is too large in view of the transportation distance and the contract quantity. Accordingly, the consortium is likely to finally charter total three vessels through discussion in the future.
Meanwhile, Chubu Electric Power Company and Toho Gas Co Limited has jointly run a LNG import terminal. For this reason, several persons of the industry think that the two companies will work together to charter one vessel.
Inpex, which serves as an operator of Ichthys project, has put up its policy to utilize group of ships it owns as a part of measures to strengthen gas supply chain in its long and medium term vision, which was recently released.
Inpex plans to improve function to adjust supply and demand by investing not only in gas supply sources such as Ichthys in Australia and Abadi in Indonesia but also in means of transport by vessels it owned and ships chartered.
Source: TEX Report Limited