Inpex Denies Talks on Indonesia LNG Project Stake Sale

TOKYO (Dow Jones Newswires), Jan. 14, 2009

Inpex Corp. said Wednesday it isn't ruling out the possibility of inviting companies to take part in its liquefied natural gas project in Indonesia in the future, but the company so far hasn't held any talks with anyone on a stake sale.

"Since this is a big project, many people are interested. But we are not looking for partners for the time being," said Kazuya Honda, Inpex's public relations group manager.

However, "partnering with other companies in energy projects is common practice in the industry," and there is a possibility that "Inpex would partner with somebody if we think it's necessary to diversify risks," he added.

The Nikkei reported in its Wednesday morning edition that Royal Dutch Shell wants to join Inpex's offshore Abadi LNG project in the Timor Sea, and the Anglo-Dutch energy giant told the Indonesian government about its intention to participate.

Inpex currently has a 100% interest in Abadi, which is expected to produce about 4.5 million metric tons of LNG a year from 2016.

Inpex didn't specify the cost of the project. But the Nikkei report said Inpex is willing to consider allowing a rival to take a partial stake to ease the burden of the cost, estimated at more than Y1 trillion.

However, Honda said the project does not cost much at this stage, where most of the work is planning and designing. Therefore, the company has no immediate concerns over funding due to the ongoing global credit crunch.

"Fortunately, it will be a couple of years before development work is scheduled to start, which normally costs a large amount of money," said Honda.

Inpex plans to move on to the development stage as early as 2011, after making the official investment decision around that year, Honda noted.

The Indonesian government recently agreed to Inpex's proposal of building a floating LNG facility to process gas from the Abadi field.  

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