May 17, 2018 / 6:30 AM / in 3 months

UPDATE 1-Japan's Inpex expects to ship first LNG cargo from Ichthys site in Aus by end-Sept -source

* First cargo to be sent to Inpex’s Japan LNG terminal -sources

* Expected to be shipped by late-September -source

* Giant LNG project has been delayed multiple times (Adds detail)

By Osamu Tsukimori and Jessica Jaganathan

TOKYO/SINGAPORE, May 17 (Reuters) - Japan’s Inpex Corp expects to ship the first liquefied natural gas (LNG) cargo from its giant Ichthys LNG project in Australia by the end of September, an industry source with knowledge of the matter said on Thursday.

The source, who declined to be identified as he was not authorised to speak with media, said the shipment would come by late-September, although it could be sent a month or more earlier.

A spokesman for Inpex, Japan’s top oil and gas producer, said the company could not give a schedule for the first cargo.

The around $40 billion Ichthys project has seen multiple delays and cost overruns of billions of dollars due to technical difficulties. It was originally slated to start in 2016.

The commissioning LNG cargo from Ichthys will be exported to Inpex’s Naoetsu LNG terminal in Japan, according to the first source and a second one also familiar with the matter.

Inpex has said the Ichthys project will start-up this month with gas production set to begin by the end of May.

Project holders in Ichthys are seeking five liquefied natural gas (LNG) cargoes for delivery into Japan and Taiwan over July to September to replace LNG they will not be able to supply from Ichthys due to delays in its start-up, two traders told Reuters.

That is to fulfil contractual commitments to buyers such as Taiwan’s state-owned CPC Corp and the world’s top LNG buyer JERA Co, a fuel joint venture of Tokyo Electric and Chubu Electric, one of the traders said.

The Inpex spokesman declined to comment, citing a confidentiality agreement with customers.

“They have indicated their interest just to a few companies, so the requirement is not firm yet,” the trader said, adding that offers were due by Thursday.

At full operation, Ichthys is expected to produce 8.9 million tonnes of LNG a year, along with about 1.7 million tonnes of liquefied petroleum gas and about 100,000 barrels per day of condensate, an ultra-light form of crude oil.

Inpex holds 62.245 percent of Ichthys, France’s Total 30 percent, with the rest spread amongst Taiwan’s CPC Corp and Japanese utilities Tokyo Gas, Osaka Gas, Kansai Electric, JERA Corp and Toho Gas . (Reporting by Osamu Tsukimori in Tokyo and Jessica Jaganathan in Singapore; Editing by Christian Schmollinger and Joseph Radford)

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