October 5, 2008

Japanese Energy Firm Eyes Gas Production Base in Indonesia

Text of report in English by Japan's largest news agency Kyodo

Tokyo, Oct. 5 Kyodo - Inpex Corp., a major Japanese energy company, is in the final stage of negotiations to build an offshore plant to produce liquefied natural gas in Indonesia, company sources said Sunday.

The company, in which the Japanese government holds a stake of 29.35 per cent, is slated to clinch a deal with the Indonesian government, possibly later this year, for what it claims to be one of the world's first floating LNG facilities, the sources said.

The facility, with an estimated construction cost of more than 1 trillion yen, is expected to come onstream as early as in 2015, the sources said.

Inpex plans to extract natural gas from an undersea field in the Masela block it is developing in the Timor Sea and export liquefied products to Japan, the sources said. An annual output of around 4.5 million tons is being eyed.

In September, Inpex announced that its Australian unit Inpex Browse Ltd. and French energy company Total will build a facility to produce more than 8 million tons of LNG per year in Darwin, northwestern Australia.

Combined with the Australian project, Inpex will be able to provide nearly 20 per cent of Japan's LNG imports.

Inpex had initially planned to deliver natural gas from the Masela block to an onshore base in Australia via a pipeline but decided to go along with the Indonesian government's wish to have a production base within its territory, the sources said.

Originally published by Kyodo News Service, Tokyo, in English 1059 5 Oct 08.

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