Herald Sun: Japanese poised for gas move [10apr06]

JAPANESE oil giant Inpex is said to be close to pushing the button on an $8 billion gas development off Western Australia in a bid to shore up supplies of highly the sought-after resource.

The company owns 100 per cent of the Ichthys field, about 440km north of Broome in the Browse Basin, which is estimated to hold at least 6 trillion cubic feet of gas.
Inpex sources told Japan's Nikkei news wire the company was prepared to spend between 550 and 700 billion ($A6.4 and $A8.1 billion) developing the resource.

The company wants to produce "a substantial volume" of gas from the project by 2012, Nikkei reported on its website.

An Inpex presentation has put the start date for the project as early as 2010.









Inpex is looking for partners to help it fund the development and has reportedly approached international oil majors.

The Japanese company will keep its leadership role, Nikkei said.

The Ichthys development is expected to produce between five and six million tonnes of liquefied natural gas (LNG) a year -- about half of the annual output of the North West Shelf.

Inpex is said to be planning to export the gas to Japan, where it will meet about 10 per cent of local demand.

Japan's move to develop and own a major gas project in Australia comes as competition for our LNG reserves intensifies.

China is scheduled to receive its first shipment of Australian LNG in the next few months, part of a 25-year contract worth $25 billion.

Australian companies are also looking to the United States as a potentially lucrative export market.

Japan is already one of the largest importers of Australian LNG and has been quick to sign up to buy gas from new projects, such as the $11 billion Gorgon gas development and Woodside's Pluto project.

Fat Prophets senior resources analyst Gavin Wendt said Inpex's foray into gas development would not effect the viability of locally-owned projects in the pipeline.

"I think the demand for gas in Japan and South Korea and also China is so large that there's plenty of room for that gas to be absorbed," he said.

Inpex is Japan's largest oil company. The Japanese government is the company's biggest shareholder.

A spokesman for Federal Resources Minister Ian Macfarlane said the Government had not yet been approached about the development.

Inpex is already involved in a number of projects in Australia.

It has a stake in the Griffin oil and gas development, operated by BHP Billiton, and is involved in exploration with local companies including Santos and Bass Strait Oil.