Regional LNG: Inpex eyeing Japan market for its Australia LNG project

Japan oil, gas firm Inpex Holdings Inc. has begun sales negotiations with Japanese power companies and gas firms for LNG from the Ichthys gas field, which is located in waters off northwestern Australia, Nikkei reported Wednesday.

Inpex is developing the Ichthys gas field and plans to build a liquefaction facility on an unmanned island near the field, where the natural gas will be converted into LNG for export.

The company at one time held 100 per cent ownership in the project.

In August, it sold a 24 per cent stake to the French multinational energy company Total, although it remains the project leader and wants to sell the majority of the LNG to Japanese companies.

Because import contracts from LNG production regions like Indonesia and Brunei expire in the second half of the 2010s, Inpex anticipates strong demand from Japanese companies for LNG from its Ichthys gas field.

Inpex has begun sales negotiations with the intention of determining customers for all 6 million tons of LNG production capacity before the end of next year.

Once these long-term sources of revenue have been locked in, Inpex will begin investing in the LNG production facility, construction on which is scheduled to begin in mid-2008. LNG production is expected to begin in 2012. (*)