Two LNG Projects ‐ Ichthys and Abadi

http://www.inpex.co.jp/english/ir/library/pdf/presentation/e-Presentation20100514-c.pdf

Ichthys LNG Project

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Ichthys Project Location

WA‐285‐P/WA‐37‐R Ichthys Field & Adjacent Area

WA‐285‐PIchthys Field

Abadi

Extent of Ichthys Field

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Brief Summary of Permit

Permit Holders: INPEX Browse, Ltd. TOTAL E&P Australia

(76%)(24%)

Exploration Term : Initial grant for WA‐285P in 1998. Renewal for 2nd term, 5 years from July 8, 2010.

Retention Lease (WA‐37R): 5 years from September 21, 2009.Currently working towards obtaining Production License for WA‐37R. Permit Area: 2,074km2 (5,049km2 at commencement in 1998) Minimum Work Obligations: (Already done)

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G&G: Geological and Geophysical Studies

1st Extension Period

Year Minimum Work Obligations

1 G&G

2 G&G

3 250km2 3D Seismic/G&G

4 G&G

5 1 Well/G&G

Primary TermYear Minimum Work

Obligations1 4500km 2D Seismic/G&G2 2 wells/G&G3 1 well/G&G4 1 well/1,200km2 3D

Seismic/G&G5 1 well/G&G6 G&G

2nd Extension Period

Year Minimum Work Obligations

1 G&G

2 250km2 3D Seismic/G&G

3 G&G

4 G&G

5 1 Well/G&G

1998

March: WA‐285‐P offered in the Australian Government’s 1997 Offshore

Exploration acreage gazette.

August: December:

Obtained Exploration Permit for the WA‐285‐P (Share 100%). Acquired 2D seismic with line length approx. 4,700km.

March 2000 – February 2001

1st Drilling Campaign of 3 wells (Dinichthys‐1, Gorgonichthys‐1, Titanichthys‐1) encountered gas and condensate pools in each well.

May‐October 2001:

The structure was named ‘ICHTHYS GAS AND CONDENSATE FIELD’ after the 3D Seismic data acquisition / processing / interpretation.

June 2003 ‐ February 2004:

2nd Drilling Campaign, 3 wells (Ichthys‐1A, Ichthys Deep‐1, Ichthys‐2A/ST1) confirmed areal extension of the reservoir and its hydrocarbon pool.

April 2007 ‐ June 2008:

Drilled Dinichthys North‐1, Ichthys West‐1 and examined further areal extension of the Ichthys Gas and Condensate pool.

Note: Current reserve volume of Ichthys Field is estimated to be 12.8TCF Gas and 527 MM barrels of Condensate

Exploration History

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Outline for Development Concept

LNG Production: 8.4 million ton per yearCondensate Production: approx. 100,000 barrel per day(Peak Rate)LPG Production: 1.6 million ton per year

Subsea Production Wells: 30 wells at Brewster, 20 wells at PloverReservoir Depth: approx. 3,900m ‐ 4,600mSubsea Production Facilities: Flow Lines, Flexible Risers

Offshore Production Facilities: CPF (Semi‐submersible Type) + FPSO (Condensate Storage and shipping)Gas Export Pipeline: 42 inchAt Darwin Onshore Facilities: produce, storage, and ship LNG, LPG and CondensateOnshore Storage Tank capacity:

– LNG Tank

– C3 Tank

– C4 Tank

– Condensate Tank

:2 x 165,000m3

:1 x 85,000m3

:1 x 60,000m3

:2 x 60,000m3

FLNG = Floating LNG Liquefaction off-shoreFLNG = FPSO = Floating Production Storage and Offloading

Overall Development Image

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FLNG = Floating LNG Liquefaction off-shoreFLNG = FPSO = Floating Production Storage and Offloading

Condensate

Product

Natural gas(re-pressurized and sent back to the CPF)

Water depth: approx. 250m

Special Report 1: Ichthys LNG Project

Project Development Concept

Future Milestone

2009-2011

Northern Territory

Timor Sea

IchthysWA-37-R / WA-285-P

Darwin City

100km 200km

approx. 889km

City of Darwin(INPEX Darwin Office)

Wickham Point（ Darwin LNG ）

Timor Sea

Blaydin Point(Planned construction site)

Middle Arm Peninsula

Flexible RisersThese are pipes for transporting

product from the seabed to the CPF.

Flowline

Drill CenterThis equipment is placed on the seabedfor direct connection to a number of development wells.

Outline of Development Concept

Production volume:

LNG: 8.4 million tons/year

Condensate: 100 thousand bbl/d (peak rate)

LPG: 1.6 million tons/year

Subsea development wells: 30 wells at Brewster, 20 wells at Plover

Reservoir depth: Approx. 3,900 m - 4,600 m

Subsea production facility: Flowline, flexible riser, etc.

Offshore production facility: CPF + FPSO

Gas export pipeline: 42” subsea pipeline (approx. 889 km)

Darwin onshore facilities:

Onshore storage tank

capacity:

Produce, store and ship LNG, LPG and

condensate

LNG Tank : 2 × 165,000 m³

C3 Tank : 1 × 85,000 m³

C4 Tank : 1 × 60,000 m³

Condensate Tank : 2 × 60,000 m³

Ichthys gas-condensate field location•Browse Sedimentary Basin of the Western Australia continental shelf•Approximately 200 km offshore Western Australia

Water depth•Block water depth: 170 m–340 m•Offshore production facility depth: approx. 250 m

Block area• WA-37-R: 913 km2

• WA-285-P: 1,161 km2

CPFProcesses the product received via theflexible risers from the development wells, separating it into gas and condensate.

Offshore Production FacilitiesThese are composed of a central processing facility

(CPF) for the separation of natural gas and condensate

and a floating production storage and offloading (FPSO)

vessel for the storage and offloading of condensate.

■Condensate: 85 thousand bbl/d (peak rate)

Onshore Facilities

These are composed of the LNG plant and onshore storage facilities. The planned site for these facilities is Blaydin Point, which is across the harbour from Darwin.

■LNG: 8.4 million tons/year■LPG: 1.6 million tons/year■Condensate: 15 thousand bbl/d (peak

rate)

FPSOThe FPSO receives condensate from the CPF and handles storage (storage capacity1.2 million barrels) and shipments (85,000 bbl/d peak). Some of the natural gas is re- pressurized and sent back to the CPF.

Gas Liquefaction PlantThe gas liquefaction plant will extractcondensate and LPG from the natural gas pumped via the pipeline. Using two trains, the liquefaction plant will then cool the remaining natural gas to –162°C to form LNG. It will handleshipments of approximately 8.4 million tons/year of LNG, 1.6 million tons/year of LPG and 15,000 bpd of condensate.

Gas Export PipelineThis is a 42” wide pipeline connecting the CPF with the onshore LNG plant. The pipeline route takes it as deep as 250 m, and to a length of approximately 889 km.

Participated in an open bid, permit acquired

▶ Submitted a bid for WA-285-P in an open bid process conducted by the Australian Federal Government; a permit was acquired

▶ Invitation to tender (ITT) for the CPF issued in

November 2010

▶ Preparatory work for the EPC procurement phase of the onshore LNG plant began in December 2010

▶ Engineering work for the LNG plant

completed in March 2011 / Preparatory work underway / Major engineering work in process at off-shore facilities

Government approvals

▶ Public review of EIS during the period July–September 2010

▶ EIS supplement taking public review into consideration submitted to government in April 2011

▶ Environmental approval received from the

government of the Northern Territories in May 2011 and from the Australian Federal Government in June 2011

▶ Field development

plan and production license application submitted to the government in April 2011

▶ Q4 2011: Final

investment decision (FID)

▶ Q4 2016:

Production start

Appraisal of recoverable reserves

▶ Confirmed the extension of the

Ichthys gas-condensate pool through further drilling of two wells

Preparation for development

▶ Started FEED activities for the

onshore LNG plant, the offshore productionfacilities and the pipeline in 2009

DevelopmentWell

First drilling campaign

▶ Confirmed the presence of gas and condensate in all three exploratory wells

▶ Acquired, processed and

interpreted 3-D seismic data

Second drilling campaign

▶ Drilled three exploratory wells to

verify reserves; confirmed the areal extension of the reservoir and the presence of gas and condensate

Project History1998 2000 –

20012003–

20042007–

2008

042 INPEX CORPORATION Annual Report 2011 INPEX CORPORATION Annual Report 2011

043

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Offshore Facility Layout

FLNG = Floating LNG Liquefaction off-shoreFLNG = FPSO = Floating Production Storage and Offloading

FSRUCentral Processing Liquefaction Facility

Semi-submersible Type

Subsea Well and Infield Flowlines

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CPF/FPSO

・ Hull size approx. 110m x110m. One of the biggest in the world similar size to GOM Thunder Horse.・ Living Quarters (150 personnel capacity) will be installed on South side・ Flexible Riser will be installed on North side.

・ Approx. 330m x 56m・ Liquid from CPF will be transferred through Turret・ Storage Capacity ： 1.2 million barrel・ Gas will be backed to CPF upon re‐pressurized・ Living Quarters (150 personnel capacity) will be installed

Gas Export Pipeline

Specification

– Size and Thickness– Length– Allowable Pressure– Material– Total Weight– Water Depth at Route

: 42”x31mm

: approx. 885 km: 200 Bara

: X65

: approx. 800,000 ton

: approx. 250m ‐ 0m

Image

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LNG Plant Site Location

Decided Onshore LNG Plant Site at Darwin

–

–

Announcement was issued at Darwin date on September 26, 2008

Messrs. Martin Ferguson, Australian Resources Ministerand Paul Henderson, Chief Minister NT attended

LNG Plant Site Location

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LNG Plant Layout

Module Offloading Facility

Image

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GHG (Greenhouse Gas) Management (1)

Situation in Australia

‐ Carbon Capture and Storage (CCS) Law (Offshore Petroleum Amendment (Greenhouse Gas Storage)) became effective in November 2008

‐ CCS acreages released in March 2009

‐ Carbon Pollution Reduction Scheme (CPRS: emissions trading scheme) bill passed the Australian House of Representatives on Jun. 4, 2009 and was sent to the Senate. The bill was rejected by Senate twice (August 2009 and December 2009)

‐ On April 27,2010, Prime Minister of Australia Kevin Rudd announced the CPRS scheme would be deferred until 2013 at the earliest.

‐ On February 24,2011, Prime Minister of Australia Julia Gillard announced the Climate Change Framework would introduce fixed carbon price from July 2012.

INPEX Efforts

‐ Reduction of GHG emissions by optimizing the energy efficiency of Offshore / Onshore facilities. e.g. less flaring etc.

‐ Study the measures to reduce or offset GHG emissions

• Biosequestration, Geosequestration, Australian or international emissions permits.

‐ As for Biosequestration, we are carrying out a reforestation assessment project (700ha, South West of WA).

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GHG (Greenhouse Gas) Management (2)

The graph below shows CO2 emission in kg per 1MWh electric generation

*Historical Aus LNG : NWS, Darwin LNGSources : adapted from APPEA 2009, J.P. Morgan Equity Research 2008, and Pace 2009

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Contribution to Local Community

Djarindjin Signing Ceremony (April 2009)

Fred’s Pass Rural Show (May 2009)

Larrakia Trade Training Centre Opening Ceremony (April 2011)

Larrakia Trade Training Centre

Development Schedule

To obtain Environmental Approval

FID

Application of Production Licence

Onshore & Offshore Facilities

FEED Detailed Engineering

LNG purchase commitment from buyers

Procurement

Gas Marketing

Government Approvals

Construction

First LNG

2011Q4 2016Q4

EPCDecision

Application of Environmental

Approval

Public Comments

Submission of additional information

To obtain Production Licence

Project Finance

To sign loan agreement Drawdown period

To confirm lenders’ intention

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TOTAL E&P Australia

INPEX Browse, Ltd. (Operator)

WA-285-P

Joint Venture

Project Organization Chart

76%

24%

Tokyo Head Office Ichthys Project Committee

Executive Management

Corporate Coordination

External Affairs & JV

HR

Administration

Darwin

Ichthys Project

Commercial Coordination

Commercial& Legal

Finance

IM&T

Project Coordination

HSEQ

Environment

GHG

Project Services

Contracts & Procurement

Logistics

Development Planning

Geosience

Reservoir

Drilling & Completions

Operations

New venture & Exploration

Offshore Technical

CPF & FPSO

GEP

Interface & Risk

SPS

URF

Flow Assurance

Onshore Technical

Onshore Facility

Dredging

Construction & Fabrication

Train Utility Offsite

CCPPTank Pipeline

Civil

MOF, Jetty, Trans Barge

Commissioning

OBT

Perth

LNG Market

Market ：– Asia, North America, Europe

Buyers ： In Asian region, Electric/Power companies and City Gas companies in Japan, South Korea, China, Taiwan, Singapore, Thailand, Indonesia etc.

Price ：– Asian LNG Prices are generally linked to JCC (Japan Crude Cocktail)– Indonesian LNG Prices are basically linked to ICP (Indonesian Crude Price)– There is a time lag between the movement of crude oil and LNG prices: LNG

prices are normally linked to JCC a few months before the date of LNG sales.

Contract Type (typical) ： Long‐term (e.g. 20 years)

Contract Terms (typical) ： LNG is marketed to buyers by the operator jointly with project partners, unlike equity lifting in oil sales.

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Condensate Market

Market:– Condensate production of 3.18 million barrels per day (2011E) and condensate

splitter capacity of 1.66 million barrels per day in the entire Asian region (2011E)– Condensate production of 99 thousand barrels per day (2011E) and condensate

splitter capacity of 0.67 million barrels per day in Asia excluding the Middle East (2011E)

– 22 thousand barrels per day imported to Japan (2010)– Surplus condensate is mainly exported to U.S.A and Europe.

Buyers: Refining companies and traders in Japan, South Korea, China, Taiwan, Singapore, Thailand, Indonesia etc.

Use: Petrochemical feedstock, Refinery material

Price: Linked to price of Dated Brent, Dubai, and similar crude oils produced in the nearby areas

Contract Type: FOB or CFR

Contract Term: Annual term and Spot

LPG Market

Market– U.S. is the largest LPG consumer in the world, while in Asia‐Pacific, China, India

and Japan are the main consumers in the order of consumption.– Japan is the world largest LPG importer importing about 12 million ton per

year. It accounts for approximately 80% of total consumption in Japan. (2009)– Main exporters are countries in the Middle East, while main importers are

countries in the East Asia including Japan. About 27 million ton of LPG is supplied to East Asian countries, which corresponds to a half of world sea traded LPG volumes. (2009)

Buyers– LPG wholesalers and some of Electric/Power companies and City Gas companies

are directly importing LPG in Japan.

Price– Saudi CP (Contract Price) is the extensively‐used benchmark for world exported

LPG Prices, made available in the beginning of each month by Saudi Aramco, national oil company of Saudi Arabia. Argus FEI (Far East Index, the averaged spot price in Far East) monthly announced by Argus is becoming another benchmark price for LPG in East‐Asian market.

24 Source: Poten & Partners

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PRRT （ Petroleum Resource Rent Tax)= （ Upstream Revenue － Upstream Capex & Opex － Expl. Cost － Abandonment Cost － undeducted

carried forward PRRT expenditure)×40% ・・・・・・・・・・・・・・③

⇒（ Oil/Gas sales price ） × （ Sales volume ）

・・・・・・・・・・・①

⇒OPEX incurred in relevant years （ +Exploration cost ） +CAPEX depreciation

・・・・・・・・・・②

・ Depreciation ⇒ Diminishing balance Method (effective life: 15 years for Production Facilities; 20 years for Pipelines)

・ PRRT deductions are made in the following order: Upstream Capex, Opex, Expl. Cost, Abandonment Cost.Note: Exploration cost is subject to mandatory transfer between Projects/members of same group of entities.・ Upstream Revenue = Revenue from Oil and Gas sales or GTP×Sales volume※GTP (Gas Transfer Price) →Average of “Cost Plus Price” and “Net Back Price”※Cost Plus Price → identify value based on Upstream costs※Net Back Price → identify value based on LNG FOB sales price less Downstream costs

・ Undeducted PRRT Expenditure: non‐utilised PRRT deductible expenditure can be carried forward to the following year(s), which is subject to augmentation at the rates set out below;Development cost: LTBR+5%; Expl. Cost: LTBR+15%; Abandonment cost: LTBR

*GDP Factor applies to all expenditure incurred more than 5 years before the Production Licence application is made.*LTBR = Long Term Bond Rate*GDP Factor = GDP Deflator of Australia

Corporate Tax ＝ （①－②－③－ Interest paid ） ×30 ％

Sales

Operating expense

Corporate Tax (In Australia)

Note: Gas Transfer Price

“Gas Transfer Pricing” rules prevent taxpayers from setting arbitrary upstream gas sales price where both upstream and downstream interests are held by the same entity (or entities).

Taxation Scheme in Australia for

Ichthys Project

※The content may be changed

Ichthys Project History

1Q2Q 3Q 4Q1Q 2Q 3Q 4Q1Q 2Q 3Q4Q1Q 2Q 3Q4Q 1Q 2Q 3Q4Q 1Q 2Q3Q 4Q 1Q 2Q3Q 4Q 1Q2Q3Q 4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q

Contract year

WA-285-P /Ichtys

GeophysicsActivity

Drilling (Ichthys/WA-285-P)

Development Engineering

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2010 20112008 2009

Permit Effective date

（ 1998/8/19 ）

Location Block Approvall

1st Renewal

Partial relinquishment2nd renewal

3D Seismic data acquisittion

（ 4674km ）

3D Seismic data acquisittion (multi‐Client data 1358sqkm)

Dinichthys 1‐

Gorgonichthys 1‐

Titanichthys 1‐

Ichthys 1A‐

Ichthys Deep 1‐

Ichthys 2A/ST2‐

Dinichthys North 1‐

Ichthys West 1‐

Commencemtn Onshore FEED Release ITTfor

CPFCommencemtn Onshore FEED Release ITT for

Onshore gas processing

facilities

3D Seismic data acquisittion (multi‐Client data 1610sqkm)

Complete

Onshore FEED

1RY3 2RY1 2RY21RY4 1RY5Y1 Y2 Y3 Y4 Y5 Y6 1RY1 1RY2

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Abadi LNG Project

FLNG = Floating LNG Liquefaction off-shoreFLNG = FPSO = Floating Production Storage and Offloading FSRU = Floating Storage & Regasification Unit - Tanker

FSRU – TankerSpherical design

FLNG = FPSO

Kupang

Dili

Darwin

Greater Sunrise

JabiruChallis Cassini

PetrelSkua Talbot

Crux

TernCornea

Aru Islands

Tanimbar Islands

Saumlaki

Timor

East Timor

Banda SeaKai Islands

Blacktip

Barossa Caldita

Evans Shoal South

Evans Shoal

IchthysWA 37R

0 200km

Banda Sea

Indonesia

Abadi

Arafura Sea

Australia

Masela PSC Block

Masela PMSaseCla

IsBlock

KitanElang-Kakatua

Bayu ｰ Undan

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Abadi Gas Field (1)

Abadi Gas/Condensate Field

- Water Depth: 400 ‐ 800m- Reservoir Depth: 3,700 ‐ 3,900m- Areal closure: more than 1,000km2

Discovered gas and condensate in Abadi‐1 exploration well in 2000Drilled 6 additional appraisal wells, and confirmed the extension of gas and condensate pools in the Abadi structureThe gas reservoir pressures are plotted on the same line in the pressure v.s. depth plot which demonstrate the communication of the pressure between wells

Abadi Gas Field (2)

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Production Sharing Contract

Contractor:

Effective Date: Contract Period: Exploration Period:

Contract Area :

Indonesian Participant:

INPEX Masela, Ltd. (90%)

PT EMP Energi Indonesia (10%) November 16, 199830 years10 years (proceed to Development and Production Period in case of commercial discovery)3,221.3km2 (already partially relinquished twice from the original 5,725km2)a 10% Participating Interests will be offered to an Indonesian company designated by Indonesian Government

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Plan of Development (POD‐1)

Indonesian Government (BPMigas) approved the POD‐1 in Dec. 2010.

Development Concept as approved in the POD‐1‐ Floating LNG‐ Initial development focusing on the North block‐ LNG production of 2.5MMt/y for more than 30 years‐ Condensate production of 8,400 bbl/d‐ Subsea Production System Advantages of the FLNG development Option

‐ Minimum environmental impact‐ Reduction in CAPEX, OPEX and abandonment

work & cost‐ Possibility to reduce project lead time

Schedule‐ Preparation of FEED works and AMDAL

(Environment & Social Impact Assessment Process) are on going

‐ Further Study for Future Subsequent Developments according to gas reserves

FLNG 3D Imaga

SUBSEA Image32

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Development Concept

Development Facilities

Development Scheme : Subsea Production System + Floating LNG

Development Well

Floating LNG: Max 6 production wells (Directional Wells from 1 Drilling Center)

: Loading LNG Plant, LNG Storage Tank, and Loading facility on

conventional FPSO

Swivel

Turret

Bow

Stern

LNG Loading Arm

Tank

Process

UtilityAccommodation

Flare Stack

FLNG image

Development Schedule

Environmental Permit

Final Investment Decision （ FID ）

Floating LNG

Subsea Production System

FEED

Procurement

Government Approval

Construction

First LNGPublic Announcement

Local hearing

Environmental & Social Impact Assessment

EPCDecision

Detailed Engineering

LNG purchase commitment from buyers

Gas Marketing

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Abadi Project History

Current Status of FLNG(LNG‐FPSO) undertaken by other Companies

Shell: LNG-FPSO (3.5 MMTPA)– Signed a master agreement with Technip/Samsung consortium for the design, construction and installation of multiple floating liquefied natural gas

(FLNG) facilities over a period of up to fifteen years in July 2009.– Signed FEED contract with Technip/Samsung consortium for the Prelude FLNG project in Mar. 2010. Received EIS Approval from Australian

Government in Nov. 2010.– Shell’s FLNG technology was selected as the Sunrise Joint Venture’s preferred option for developing the Greater Sunrise gas fields, and the Sunrise

project would be the second deployment following Prelude FLNG development. However, it is still waiting for Approval from East Timorese Government.

Petrobras: LNG-FPSO (2.5 – 3.0 MMTPA)– Started triple FEED for Floating LNG project for associated gas in the Brazilian pre-salt offshore Santos basin in Dec 2009. (FEED Contractor:

Saipem, SBM/ Chiyoda, Technip/ JGC/ MODEC) FLEX LNG: LNG-FPSO (1.7 - 1.95 MMTPA)

– Awarded Samsung a contract to build 4 Hulls in Sep 2008.– Completed FEED of Generic Design LNGP (LNG Producer) in the 1Q of 2009.– Samsung/FLEX executed agreement with Interoil to construct a 2mtpa FLNG vessel (for Papua New Guinea) in Apr. 2011. (FEED start in May

2011and FID target 2011) SBM: LNG-FPSO (2.5 MMTPA)

– Completed FEED of Generic LNG-FPSO in the 2H of 2008, reviewing applicable gas field.– Pre-FEED for PTTEP will be completed in 2011. FEED plans in 2012 and FID will likely be by 2012.

Höegh LNG: LNG-FPSO (1.6 MMTPA)– Completed FEED (May, 2008 – March, 2009) of Generic LNG-FPSO, reviewing applicable gas field.– Höegh LNG, DSME E&R, a subsidiary of Daewoo Shipbuilding & Marine Engineering Co., Ltd and Petromin PNG Holdings. Ltd, in Papua New

Guinea, signed a cooperative development agreement in July 2010 to evaluate the potential for the development of gas fields in the sea near Papua New Guinea by FLNG.

GDF Suez: LNG FPSO (2.0 MMTPA)– Awarded Pre-FEED contract for Bonaparte FLNG to Granherne, KBR subsidiary for upstream and Doris Engineering for midstream in January 2011.

Petronas: LNG FPSO (1.0 MMTPA)– Awarded FEED contract to Technip/DSME in January 2011. Completion of FEED is planned 2nd half of 2011.

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