Inpex Holdings Inc, Japan's largest oil explorer, has revealed it is studying Darwin as a site for a proposed liquefied natural gas project in Australia, as opposition to a preferred location on the Maret Islands of Australia’s northwest coast threatens to delay the venture.

The revised study from the Tokyo-based company envisages a two-unit LNG plant in the Northern Territory capital, with a capacity for more than 8 million metric tonnes per year. A decision regarding the site for the plant will be taken later this year.

Previous plans by Inpex and Total SA to build a $9.4bn LNG plant on the Maret Islands off Australia's northwest, to process gas from the Ichthys fields in the Browse Basin, are being opposed by environmental groups. Taking Ichthys gas to Darwin would require an 850km pipeline, rather than a 190km link needed to the Maret Islands.

Inpex can't yet estimate the cost of building a pipeline to Darwin from the Browse Basin, said Kazuya Honda, a spokesman in Tokyo, while Inpex and Paris-based Total have recently signed a so-called project facilitation agreement with the Northern Territory government as it takes ‘a serious look’ at Darwin as the chosen location.

Paul Henderson, Chief Minister of the Northern Territory, reflected in a statement, “Darwin offers a high degree of certainty and security for the project, with land on Middle Arm Peninsula available for the development of current and future LNG facilities. The opportunity for Browse Basin gas to be processed in Darwin is a viable option for Inpex.”

Woodside Petroleum Ltd, which is also considering sites for an LNG plant to serve a project in the Browse Basin, indicated last week that it had ruled out taking gas to Darwin for processing.