Total may buy stake in Inpex's $6 bln LNG project

Total SA, Europe's third-biggest oil producer, may buy a stake in Inpex Holdings Inc.'s $6 billion liquefied natural gas project in Australia as prices of the cleaner-burning fuel soar, officials at both companies said. Total is in talks with Tokyo-based Inpex and may sign an agreement this month to buy 25 percent of the so-called Ichthys project, said the officials, who asked not to be identified because the accord hasn't been signed. Inpex plans to tap Total's expertise deployed at ventures such as Yemen LNG and to share costs at Ichthys. Paris-based Total wants increased LNG sales in Japan, Korea and China as they reduce reliance on crude oil imports from the Middle East. Total Chief Executive Thierry Desmarest in June said „LNG is the best answer” to global energy needs. „Scale of profit from the project is expected to be large, as the proposed plant's size is world class,” Shigeki Matsumoto, an analyst at Nomura Securities Co. in Tokyo, said by phone. Selection of a project partner is one step to push ahead.
Osaka Gas Co., Japan's second-biggest gas distributor, last month said it's in talks with Inpex on joining the Ichthys project. Tokyo Electric Power Co., Asia's biggest power producer, may buy LNG from Ichthys, it said in June.
LNG is natural gas that has been cooled to liquid form for transportation by ship to markets beyond the reach of pipelines. Import terminals return the LNG to gas form so that it can be sent through pipelines to customers such as factories, power stations and households. Total is in negotiations to buy the stake in the Ichthys field, 850 kilometers (528 miles) west of Darwin, and a proposed gas liquefaction plant, the officials said. Ichthys holds an estimated 9.5 trillion cubic feet of natural gas. Japan, the world's biggest market for LNG, is competing with the U.S. and China for supplies as global demand surges. The switch to gas has been prompted by slowing discoveries of new oilfields demand from power producers seeking a cleaner-burning fuel than coal or oil. Japan's utilities are looking to gas projects in Australia and Russia to help make up for declining shipments from Indonesia, the world's largest LNG exporter. (Bloomberg)