Japan's Osaka Gas and Kyushu Electric Power have signed a 12-year LNG transportation agreement with shipping company Mitsui OSK Lines to lift contracted volumes from the Ichthys LNG project offshore Australia, Osaka Gas said in a statement late Thursday.
The transportation contract will run for 12 years from 2020, and will be transported by a 75,000 dwt LNG carrier to be built by Mitsubishi Heavy Industries.
Osaka Gas has a 15-year contract to lift 800,000 mt/year from the Ichthys LNG project, while Kyushu Electric has contracted 300,000 mt/year over 15 years, both on a free-on-board basis. First LNG supply for both contracts will start in 2017.
Osaka Gas and Kyushu Electric Power have decided to jointly arrange for the lease of one vessel, as their combined offtake would allow for the chartering to be more economically efficient rather than each company arranging transport separately.
Construction on the Ichthys LNG project began in May last year, with the project scheduled to start up by end-2016.
This involves the development of the Ichthys field in the Browse Basin, located about 200 km (124 miles) off northwestern Australia. The field holds resource estimates of 12.8 Tcf gas and 527 million barrels of condensate.
Gas will be piped 889 km through the Southern Hemisphere's longest pipeline to a two-train liquefaction plant at Blaydin Point in Darwin.
The two-train liquefaction facility will have the capacity to produce 8.4 million mt/year of LNG, as well as 1.6 million mt/year of LPG and around 100,000 b/d of condensate at its peak.
