Inpex Ichthys LNG audit found electrical hazards - report

MELBOURNE (Reuters) - An audit of the Ichthys LNG floating facilities, run by Japan’s Inpex Corp off northwestern Australia, found electrical hazards that could have sparked a gas explosion, an Australian newspaper reported on Friday.

More than half the electrical equipment checked in hazardous areas on one of the facilities was deficient, the West Australian newspaper said, citing documents from an independent audit commissioned by Inpex last year.

Planned steps to address electrical hazards “do not in their current form reduce the risk of a Major Accident Event from the ignition of flammable gases by electrical equipment to as low as reasonably practicable,” the audit, cited by the newspaper, said.

A “major accident event” is defined by Australia’s offshore petroleum safety regulator as any event that could kill many people at or near a facility.

Inpex’s spokesman in Perth said the report cited by the newspaper was a draft written by engineering firm Kentech more than four months ago and “all of the findings that we deemed valid have been fixed”.

“The issues we’re facing are manageable and don’t threaten the facilities,” Inpex general manager Bill Townsend said. “There’s no reason at all to slow production.”

The $40 billion Ichthys LNG project, Japan’s biggest overseas investment and the country’s first major project as lead operator, started shipping liquefied natural gas last October, after several delays and cost overruns.

“While we refrain from commenting on the details of specific operations and schedules, the project is on track to reach its production plateau within 2-3 years following the start-up of LNG production,” said Masami Mitani, Inpex’s spokesman in Tokyo, in an e-mail.

The two platforms that were audited are the Ichthys Explorer, the project’s floating central processing facility which treats gas before piping it to shore, and Ichthys Venturer, a floating production, storage and offloading facility (FPSO) to handle condensate from the Ichthys field.

The Kentech audit blamed “an underlying culture of rushing to meet deadlines” for affecting the quality and compliance of the electrical installations, according to the report cited by the newspaper.

Australia’s National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has been inspecting the Ichthys facilities regularly after raising concerns last June about electrical problems. The next offshore inspection is set to begin on Jan. 29.

For inspectors to call for a shutdown of operations by issuing a so-called prohibition notice, they would have to identify an imminent threat or risk of an accident, NOPSEMA spokesman Nicholas Page said.

“There has been no issuance of a prohibition notice for the facilities in question,” he added, referring to Ichthys Venturer and Ichthys Explorer.

Kentech was not immediately available for comment.

Reporting by Sonali Paul in MELBOURNE; Additional reporting by Yuka Obayashi in TOKYO; editing by Richard Pullin and Christian Schmollinger