July 4, 2018 / 4:38 AM / a year ago

EXCLUSIVE-Japan's Inpex delays production from giant Australia gas project

TOKYO, July 4 (Reuters) - Japan’s Inpex Corp has delayed gas production from its giant Ichthys field off the coast of Australia just weeks after giving assurances that output would start imminently.

Inpex’s new chief executive officer told Reuters the company was yet to start churning out gas from the $40 billion project and did not give a timetable for when that would happen.

Japan’s biggest oil and gas producer had said on June 1 that commissioning of all onshore and offshore facilities at the much-delayed project was complete and that gas would start flowing within a week or two.

“There are various minor issues to address in the final safety checks ... but there are no major problems with the facilities,” Ueda, 61, said on Tuesday in his first interview with overseas media since taking the helm at Inpex last month.

The liquefied natural gas (LNG) project, already hit by multiple delays, is a major test for Inpex as it marks the first time it has operated a major energy development on its own.

“We can start production in the not too distant future,” Ueda said, without giving details. He added that the company is keeping its target to ship its first LNG cargo by the end of September.

Delays are common with large projects like Ichthys, but the development has been plagued by a wide range of issues, including contractor disputes, technical difficulties and bad weather.

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 around 100,000 barrels per day of condensate, an ultra-light form of crude oil. (Reporting by Osamu Tsukimori; Writing by Aaron Sheldrick; Editing by Joseph Radford)

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