Total reduces interest in Ichthys field by £1.2bn

The Ichthys LNG Project’s central processing facility – Ichthys Explorer – arrives in Australian waters following a 5600 kilometre tow from South Korea.
The Ichthys LNG Project’s central processing facility – Ichthys Explorer – arrives in Australian waters following a 5600 kilometre tow from South Korea.

Oil and gas exploration giant Total has confirmed that it will reduce its interest in the Ichthys liquefied natural gas (LNG) project in Australia.

The firm said it would divest a 4% stake to operating partner Inpex for more than £1.2 billion.

The transaction, which is subject to Australian regulatory approvals, reduces Total’s interest in the asset to 26%.

Arnaud Breuillac, president of exploration and production at Total, said: “This transaction is part of our constant portfolio review to optimize our capital allocation. Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase.

“The final CAPEX estimate provided by the Operator is around 45 B$ to be compared to an updated figure around 40 B$ in 2017. In line with our capital discipline policy, we have therefore decided to control our capital employed in Ichthys by monetizing a 4% stake after the project start-up and de-risking.

“We are of course committed to the Ichthys project with our remaining 26% interest contributing to our growth both in production and cash flow from 2019 and beyond. LNG is a core area for Total – the world second-largest privately owned player with a strong pipeline of low breakeven pre-FID projects in our portfolio.”

The Ichthys offshore facilities and the two-train onshore liquefaction plant will supply 8.9 million tons per year (Mt/y) of LNG and 1.65 Mt/y of liquefied petroleum gas (LPG), along with 100,000 barrels of condensate per day.

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