INPEX Northern Development Taskforce Site Evaluation Workshop

INPEX

Northern Development Taskforce Site Evaluation Workshop

Broome, Western Australia

24 July 2008

2Ichthys is a Joint Venture between INPEX and Total

Agenda

1. Corporate Overview – who we areIchthys Project JV

2. Ichthys Gas-Condensate FieldOverview

3. Onshore Site EvaluationSite evaluation process and work undertaken

4. Maret Islands The case for Maret IslandsExpandability


Energy Demand…. IN PEX INPEX BROVVSE, LTD.

TOTAL


Ichthys Joint Venture

The Ichthys project relates to permit WA-285-PA Joint Venture between INPEX & Total INPEX Browse - 76% stake - OperatorTotal E&P Australia - 24% stake - technical supportPropose to develop Ichthys for LNG project2006 – Commonwealth grants Major Project Facilitation StatusLegally obliged to commercialise the Ichthys gas-condensate field (Offshore Petroleum Act)

Ichthys Gas-Condensate Field


Ichthys Gas - Condensate Field

ICHTHYS FIELD

Discovered March 2000

Two reservoirsBrewster MemberPlover Formation

P50 recoverable reservesGas: 12.8 TcfLiquids: 527 mmbbls

Water depth 90 -240m

Reservoir depth~4000m

470km North of Broome0 100

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KUNUNURRA

BROOME

WYNDHAM

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WA-285-P

Western Australia

Territory of Ashmoreand Cartier Islands

Joint PetroleumDevelopment Area

Timor Sea

Browse Island

Indonesia

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Ichthys (WA-285-P)


Ichthys Relative to Broome

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INPEX Site Evaluation Process


INPEX Site Evaluation – Phase 1

INPEX site evaluation – Phase 1Conducted in 2002

Initial desktop review of potential sites including offshore, mainland and island locations – identify “show-stoppers”Desktop screening & ranking exercise Site visits (aerial, marine & land investigations)Screening against site evaluation criteria

18 sites evaluated in phase 1:Adele Island*Battery Point/Sampson InletBeagle BayBigge IslandBroome*Browse IslandCape Leveque Cape VoltaireCassini Island

* Eliminated prior to detailed desktop study

Cockatoo IslandDeep Water PointEchuca ShoalsEmeriau Point/Pender BayKoolan IslandLangiiMaret IslandsTroughton Island*Wilson Point*


INPEX Site Evaluation – Phase 1 (2002)

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INPEX Site Evaluation Criteria

1. Environmental SensitivityDredging requirementMangrovesCoralsMarine Flora & faunaVisual amenity

2. AccessLand area (300ha minimum)Land tenureNative titleAccessibility

3. Physical EnvironmentProximity to deep water Tides & currentsGeneral terrestrial topographyExisting infrastructure

4. Development ConsiderationsProximity to Ichthys FieldHealth & Safety ConstructabilityOperabilityTechnological riskHydrocarbon Risk

5. Commercial & Marketing IssuesAccess to domestic gas marketSynergistic opportunities

Potential sites were evaluated against 5 broad areas:

June 2008 NDT Interim Report confirms process was “appropriate & comprehensive”


Risk Management

Health & SafetyEnvironmental Commercial DevelopmentConstruction

Legal MarketScheduleSovereignFinancing

Industry evaluates sites with the goal of minimising as much risk as possible:

LNG project proponents are risk-averse and require certainty before committing to

invest the billions of dollars needed to advance an LNG project.


INPEX Site Evaluation Process – Phase 2

INPEX site evaluation - Phase 2 Conducted in 2004

Used 2002 results as basisAcquired satellite & aerial imagery Analysed using advanced geographic information system software

Sites evaluated in phase 2:Cassini IslandChampagny IslandCockatoo IslandKoolan IslandMaret Islands

Shortlist of sites – Cassini Island, Champagny Island, Maret IslandsTechnical analysis Site visitsStrength-Weakness-Opportunity-Threat (SWOT) analysis conducted

Selection of preferred site for further environmental assessmentMaret Islands


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The case for the Maret Islands(following 6 years of evaluation)


Environmental Studies

Key Studies to inform the EIA:1. Marine Ecology2. Terrestrial Ecology (flora and fauna)3. Geography and Hydrogeology of the Maret Islands4. Geomorphic Impact Assessment (Maret Island beaches)5. Air Quality Assessment6. Marine Sediment Water Quality7. Cultural Heritage8. Light Impact9. Bulk Tanker Light Reduction Study10. Noise and Vibration Impact11. Cetacean and Other Marine Megafauna12. Oceanographic Discharge Trajectory Modelling13. Socio-Economic Assessment14. Risk Management15. Turtle Population Studies16. Visual Impact Studies17. Subterranean Fauna Studies


Environmental Assessment Effort

Maret AO survey effort to date:> 4,100 person-field days

Equivalent to 15 person-years> 8,000 person-logistics days

Equivalent to 30 person-years

Traditional Owners – heritage advisors and survey assistants:> 1200 person-daysEquivalent to 4 ½ person-years

Financial Commitment

2004 – 2008 : >AUD$27Million

Scientific Support> 70 scientists


Maret Islands’ Topography

Maret Islands flat topography is well-suited to development

Flat open terrain on Maret Islands:Minimises impact from construction & developmentFacilitates rehabilitation at end of projectGeotechnical conditions suitable – studies confirm

Maret Islands’ topography is perfect for LNG development

No standing fresh waterNo evidence permanently inhabitedNo land mammals or marsupials


Maret Islands – Access to deep water

Immediate access to deep water (20+ metres)No dredging required to support LNG tanker shippingProtected water - no breakwater requiredRelatively short jetty –reduces environmental impactTechnical & environmental disciplines aligned30m20m

Access to deep water = no dredging


Marets Away From Whale Populations

Detailed research demonstrates that the Maret Islands are a long way from the major whale calving and resting areas along the Kimberley Coast

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Maret Islands Vegetation – Not Unique

No DRF

All species present on the Maret Islands have been found on the other islands and mainland surveyed in the region

2 species of priority flora (P4) have been discovered:

Pittosporum molaccanumBrachychiton xanthaphyllus

4 species of potentially significant flora identified – impacts on populations will not be significant

Vine thickets are present and primarily restricted to the island slopes - outside of the development footprint (at least 90% of vine thickets can be retained)


Terrestrial Vegetation

Island Species Genera PriorityFlora

Berthier 244 163 1

East Montalivet 166 126 1

West Montalivet 127 104 2

North Maret 186 124 2

South Maret 212 142 1

Floral Diversity


Terrestrial Fauna

Surveys conducted on North Maret, South Maret, East Montalivet, Prudhoe, Lamarck, West Montalivet, Walker, Albert & Bigge islands


No Declared rare fauna

No terrestrial mammals (3 bat species)

Species present on Maret Islands found on other islands in the region

Short Range Endemics occur including potential new species –largely confined to vine thickets

No Declared rare fauna

No terrestrial mammals (3 bat species)

Species present on Maret Islands found on other islands in the region

Short Range Endemics occur including potential new species –largely confined to vine thickets

Terrestrial Fauna


Terrestrial Fauna

Island Reptiles Amphibians Land Birds

Berthier 17 0 23

East Montalivet 17 1 23

North Maret 13 0 24

South Maret 21 0 24

Fauna Diversity


Turtle Studies

Aerial surveys

DNA sampling

Satellite tracking

Ground surveys of nesting turtles and hatchling emergence

Sand temperature variability


Turtle Nesting

A 2007 aerial survey through most of the West Kimberley has shown:

Low - trace density nesting on nearly all islands supporting suitable beach habitat

Moderate density nesting activity on Albert, Lamarck, and Prudhoe Islands

Highest density nesting activity on Lacepedes, (Browse*, Adele*), Cassini, Maret Islands, East and West Montalivet Islands


Turtle Nesting

Genetic studies have shown that green turtles in the Maret Island area are genetically linked to the NWS management unit

NWS female green turtle stock estimate 34,500-162,500

Maret Island represent 3-14% of NWS reproductive effort based on 2006/7 data

Flatbacks are considered part of the Bonaparte management unit, some exchange with the NWS unit


Turtle Management

Turtles are present on the Maret Islands and can be appropriately managed

This can be achieved by:– Avoiding heavy disturbance during turtle nesting

– Designing plant for minimum lighting

– Enclosing flare system

– Modifying lighting on offtake vessels

– Restricting tanker operations to daylight hours

– Implementing light management plans

– Restricting vessel speeds

The topography of the islands provides natural shielding for the turtle nesting beaches from onshore infrastructure


Marine Habitats

Subtidal marine surveys have been undertaken at a number of locations:

Maret Islands, Albert, Turban, Prudhoe, Berthier, East and West Montalivets, RobroyReef, Lamarck, Champagny, Corvisart.

Detailed coral taxonomy work undertaken on:

Maret Islands,Berthier IslandEast and West Montalivets


Coral Habitats – Regional Context

Coral reefs well developed around Islands in Bonaparte Archipelago and generally have high cover

Extensive biogenic reef platforms form on the high energy coasts

Estimated 1,170 Km2 of coral reefs in Kimberley bioregion


Coral Habitats - Diversity

Island Species Genera

Maret 225 53

Berthier 191 55

Montalivets 183 55

Marsh, 1992 identified 181 species

INPEX studies have increased this to 280 species making the Kimberley bioregion the most coral diverse area in WA

2 species new to Australia


Coral ReefsCoral reefs are present on the Maret Islands (and on many other islands in the Kimberley) and need to be managed

This can be achieved by:– Minimising nearshore infrastructure footprint on corals

– Avoiding / minimising nearshore dredging

– Disposing of spoil at an appropriate location

– Establishing coral protection triggers for and management response

– Maintaining natural hydrodynamics by using open trestle jetties & bridges

– Separating produced formation water offshore

– Treating effluent to minimise contaminants

– Discharging through diffuser at safe location

– Avoiding spills through high integrity design, bunding etc.

– Implementing an oil spill response capability

Coral losses will be restricted to less than 5% consistent with the EPA Guidance document No. 29


Kimberley TourismNDT Interim Report identified a number of concerns relating to tourism:

Accommodation availability

Marets independent of Kimberley tourism infrastructure – self-contained

Airline prices to BroomeMarets fly-in/fly-out unlikely to go via Broome – no impact

Labour shortage for tourismIsolated LNG facility not competing directly with tourism for labour

Shipping movementsOfftake tankers do not transit coastal waters

Housing Availability

Marets are self-contained and independent – no real estate impact

Maret Islands as an LNG Hub


Maret Islands Relative to Browse Permits Maret Islands ideally situated to capture present & future Browse gas

Central site fundamental to ensuring “competitive neutrality”

When selecting a hub site, important to plan for future exploration success


Maret Islands Relative to Browse Permits Southern Kimberley Sites Place Severe Constraints on Development

Inequity in distances from fields is not “competitively neutral”

Selecting a suboptimal site location has the potential to make projects sub-economic or technically unviable


Maret Islands LNGMaret Island location preferable to mainland site

“Footprint” is contained– no creep/expansion beyond island boundaries– no new overland infrastructure required– no permanent long-term human presence – no offtake tanker traffic through coastal watersClose to discovered gas fields & central to Browse Basin– ~180 km to Ichthys– ~320 km to nearest known gas viable reserveEnvironmental Management– Away from major whale mating and resting areas– No terrestrial mammals or marsupials on islands– No unique species on islands– Turtle population – can be managed with minimal riskFavourable Topography– Flat terrain reduces need for land disturbance and minimises long-term

impact


Maret Islands LNGFavourable bathymetry– Deep water immediately offshore means little to no dredging requiredLand Tenure– Unallocated Crown Land facilitates development– Native Title applies Heritage– No evidence Marets permanently occupied by humans (Heritage) Size– Maret Islands can accommodate > 30 mtpa LNG production using

proven technology– Suitable for single operator multi-user LNG hub development Additionality– Maret Islands could be used to provide 24/7 air & sea rescue support

to region (as well as law enforcement/border patrol)Remote– Maret Islands’ remoteness means all the benefit with few of the hassles


Maret Islands as a Hub

INPEX site evaluation based on standalone Ichthys project and extensively investigated

Hub concepts have been modelled, but to a lesser degree

30+ mtpa LNG possible using existing technology

Maret Islands appear viable and attractive as single operator LNG hub location

2007 Max Capacity Study Concludes Marets Suitable for > 30 mtpa LNG

Ichthys proposal for 2 train development can be expanded to accommodate hub


Conclusion

LNG developments are highly complex and very difficult to develop – sensitive to risk

The Maret Islands are the best option for an LNG development in the Kimberley

No co-dependant industries opportunity – it’s a clear gas processing Hub only.

All planning for development is respectful of the Environment, Indigenous issues and the Region.

Thankyou

Back-up


Maret Island Hub – Draft Layout

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FOR !PRESENTATION PUIRPOSES ONLY

TOTAL


INPEX & Total Activity in Region

We are keen to ensure that hub accommodates future discoveries beyond Ichthys


TOTAL


INPEX & Total Activity in Region

We are keen to ensure that hub accommodates future discoveries beyond Ichthys


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INPEX – Global Assets

INPEX currently participates in 72 projects in 26 countries


Largest Japanese Oil & Gas Company

Engaged in the exploration & production of oil & gas since 1966

Head office in Tokyo with branch offices in Perth, Jakarta, London, Houston and elsewhere

Over 1,700 staff globally (~250 employees in Australia)

Supply gas for about 40% of all Indonesian LNG production exported to Japan

Operator of Ichthys gas-condensate field

Active in Australia (Griffin, Bayu Undan/DLNG, exploration)

Net proved reserves - 1,645 MMboe

Net Probable Reserves - 2,721 MMboe

Participate in Bontang LNG, Bayu Undan/DLNG, Tangguh

INPEX Holdings - Overview


World’s 4th largest publicly-traded integrated international oil & gas company

2nd largest capitalisation on the Euronext Paris and the Euro zone

2007 sales: €158.7 billion (A$260 billion)

96,400 employees worldwide

Operations in more than 130 countries

Producer of oil and/or gas in 30 countries

Exploration & production operations in 40+ countries

Has cooperated with INPEX for more than 4 decades

Total Corporation - Overview


Total – LNG

Operational

BontangSnohvitOman LNGAdgasQatargasNigeria LNGQalahat

Under construction or planned

Yemen LNG Qatargas IIAngola LNGNLNG T7Brass LNGShtockmanIchthys

Total is a leader in LNG and a partner in the following projects:

LNG accounted for 20% of Total’s upstream capital employed in 2007

Documents

INPEX Northern Development Taskforce Site Evaluation Workshop