Inpex CEO: Buyers' interest in Indonesia's Abadi Liquefied Natural Gas exceeds planned production
Inpex Corp., Japan's largest oil and gas exploration company, said it received interest in buying liquefied gas from its $20 billion Abadi project in Indonesia, which exceeds the planned output.
Inpex expects the long-delayed LNG project to drive growth. It is aiming to make a final investment decision by 2027.
Takayuki ueda, CEO of Abadi, said in an interview with the media on Tuesday that "non-binding enquiries from (potential customers in) Indonesia, China and Taiwan have already exceeded Abadi’s production volume."
He said that Inpex would proceed with the marketing and finance talks.
Inpex holds a 65% share in the Abadi Project in eastern Indonesia. Shell will purchase Shell's remaining 35% in 2023.
Abadi said that 90% of its long-term contracts for the Ichthys project in Australia were with Japanese buyers. However, this share is likely to decline due to a strong demand from other nations.
Inpex is confident that it can continue to run Abadi despite Shell's departure.
Ueda said that the total cost would be lower for Ichthys despite higher engineering, procurement, and construction costs. Inpex estimates Ichthys development costs at $40 billion plus a small percent.
Inpex's three-year growth plan will see an increase in investment of 1.8 trillion yen (12 billion dollars) compared to the previous three years.
Ueda stated, "Our priority has shifted from debt repayment to growth investments and shareholder returns."
The budget will allocate 1.1 trillion yen to existing projects. More than half of this amount will go towards boosting crude production in the UAE, working with ADNOC. The remainder will be used to maintain Ichthys, and other assets.
Ueda stated that Inpex is also interested in purchasing U.S. LNG as a way to diversify its business portfolio. However, it will make a decision after evaluating the prices, flexibility and possible labour cost increases.
Ueda said that he would watch and wait to see what happens with President Donald Trump’s energy policy.
He declined to comment about the Alaska LNG project but emphasized that any upstream investments must be economically feasible, citing previous exits from unprofitable U.S. Shale Oil projects.
Ueda stated that Inpex's strategy is to provide long-term gas supply. LNG and carbon storage and capture (CCS) are key elements in its strategy.
He said that "since the Russia-Ukraine War, energy security is more important and natural gas has now been recognised globally as a reliable, practical and transitional solution."
Prior to the war, environmentalists, banks, and institutional investors had curbed fossil-fuel development, including that of gas, because of stricter climate measures.
Ueda stated that Inpex would carefully evaluate renewable energy investments in the face of rising costs and lower returns. However, it remains committed to its 2030 goal of expanding renewable assets up to 1-2 gigawatts. $1 = 149.49 Japanese yen (Reporting and editing by Yuka Okasaka, Kentaro Obayashi)
(source: Reuters)
