Japan's Inpex may sell part of Ichthys LNG project

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Inpex Corp , Japan's top oil and gas explorer, is considering selling stakes in Australia's Ichthys liquefied natural gas project to firms that buy LNG from the field, a senior company official said on Wednesday.

"We are facing strong demand (from LNG buyers) to sell them stakes," Inpex Managing Executive Officer Masahiro Murayama said, acknowledging that talks have started. "The size of any stakes would be decided in negotiations."

Japan's top LNG buyers, including Tokyo Electric Power and Chubu Electric Power , have recently become more aggressive in taking upstream stakes in LNG projects, as they look to gain first-hand knowledge of projects and to secure stable supplies.

Inpex also said it expects to sign contracts to sell Ichthys LNG to five firms by late August.

The company said in June that it and project partner Total had reached agreements to sell 2.52 million tonnes of LNG a year to three firms, Chubu Electric Power Co , Toho Gas Co and Taiwan's CPC, and that it was close to finalising deals to sell to another five Japanese buyers.

"We have already reached basic agreements with the five firms and we are waiting for the contracts to be signed," Murayama said. "We expect that to be done by the end of this month."

He also said that the company has been discussing project financing with export credit agencies.

"We are considering financing most of the Ichthys scheme through project finance," he said. "We have also asked Japan's top three megabanks for financing."

Inpex aims to develop the Ichthys field in the Browse Basin off northwest Australia to produce 8.4 million tonnes of LNG, liquefied petroleum gas and condensate each year. Production is set to start in the fourth quarter of 2016.

The project is 76 percent owned by Inpex with the rest held by Total.

Wed Aug 3, 2011
Reuters