Inpex Signed up to $20 Bln in Loans for Ichthys LNG Project

Inpex Corp. (1605.TO) has signed loan contracts for up to $20 billion with more than 30 financial institutions for its $34 billion Ichthys liquefied natural-gas project-enough to fund the Australian enterprise to completion, according to the Japanese upstream energy company.

Inpex will finance the remaining $14 billion from funds it raised in 2010 by issuing new shares, Masahiro Murayama, the managing executive officer of Inpex's Finance & Accounting division, told reporters Tuesday.

The project's cost projection is unlikely to change, Mr. Murayama said, noting that Inpex took longer than normal to ensure its estimate was precise, factoring in rising labor costs, for example.

Several ongoing Australian LNG projects have blown out their cost projections due to rising material and labor costs.

Chevron Corp. (CVX) earlier this month adjusted the cost of its Gorgon LNG project in Western Australia to $52 billion Australian dollars (US$54 billion), up more than 40% from its previous estimate, in U.S. dollar terms.

Inpex, which is the operator at Ichthys, made its final investment decision on the project in January. It is targeting production of 8.4 million metric tons of LNG a year, with deliveries--mostly to Japanese utilities--slated to start by the end of 2016. Japanese utilities will buy most of the gas.

Inpex owns 66% of the project while France 's Total SA (TOT) has 30%. Tokyo Gas Co. (9531.TO), Osaka Gas Co. (9532.TO), Chubu Electric Power Co. (9502.TO) and Toho Gas Co. (9533.TO) each own small minority stakes, accounting for the remainder of the project's shareholding.