Search

 

Cablegate: Inpex Likely to Opt for Offshore Lng Terminal In

VZCZCXRO1085
RR RUEHFK RUEHKSO RUEHNH
DE RUEHKO #2948 2960803
ZNR UUUUU ZZH
R 220803Z OCT 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 8148
INFO RUEHJA/AMEMBASSY JAKARTA 4392
RUEHFK/AMCONSUL FUKUOKA 0514
RUEHNH/AMCONSUL NAHA 2870
RUEHOK/AMCONSUL OSAKA KOBE 4288
RUEHKSO/AMCONSUL SAPPORO 1087
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC

UNCLAS TOKYO 002948

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EPET ENRG PREL ID JA
SUBJECT: INPEX LIKELY TO OPT FOR OFFSHORE LNG TERMINAL IN
INDONESIA'S MASELA BLOCK

1. (SBU) INPEX Corporate Strategy and Planning Division
Manager Hiroshi Ikeda confirmed the firm expects to make a
decision in mid-November to construct an LNG terminal to
service the Abadi gas field in the Masela Block. Ikeda
clarified an October 5 Nikkei report, one that suggests the
firm has decided to go ahead with construction, by saying the
offshore terminal is "likely", but not yet 100% certain.
Ikeda said the Nikkei interview with INPEX company President
Naoki Kuroda was intended to focus on the firm's integration
with Teikoku Oil Co., not on the LNG terminal construction.

2. (SBU) Ikeda said INPEX has had a 100% working interest in
the Masela Block since 1998 and drilled four appraisal wells
in 2007. The firm's current production forecasts for the
Abadi gas field are for between three and five million
tons/year by 2015. (Note: This one field would meet about 7%
of Japan's current LNG import demand).

3. (SBU) Ikeda explained the feasibility of the offshore
floating platform is still under review. Surveys strongly
suggest the anticipated Abadi gas field's LNG production
would far exceed the capacity of any offshore terminal
currently in operation. Thus construction of a new and larger
offshore terminal is necessary. The firm is negotiating the
terms of the next stage of a 20-year production sharing
contract with Indonesian authorities, and the GOI has
reportedly requested INPEX construct the new offshore
platform within Indonesian territorial waters as a
prerequisite to concluding the contract.

4. (SBU) Media reports estimate construction costs at one
trillion yen (roughly $10 billion), approximately 50% more
expensive than INPEX's second option of transporting the LNG
via a 400 kilometer undersea pipeline to an onshore facility
in Australia. Ikeda described the Australian option as
perhaps less expensive and technically easier, but added it
would have unspecified transaction and tax costs associated
with transporting the gas across international borders.
SCHIEFFER

© Scoop Media

 
 
 
World Headlines

 

APEC : Leaders Issue Kuala Lumpur Declaration

The leaders of the 21 APEC member economies issued the Kuala Lumpur Declaration following the first-ever virtual 27th APEC Economic Leaders’ Meeting chaired by Malaysian Prime Minister Muhyiddin Yassin. Convening for the first time since the ... More>>

UN: Refugee Resettlement Numbers Fall To Lowest In Two Decades

Refugee resettlement numbers will be at a “record low” this year, the UN refugee agency (UNHCR) said on Wednesday, with only 15,425 people resettled in the first nine months of 2020, compared to more than 50,000 in 2019. In 2016, resettlement ... More>>

G20: Global Co-Operation And Strong Policy Action Needed For A Sustainable Recovery

The COVID-19 crisis has exposed major weaknesses in our economies that can only be fixed through greater global co-operation and strong, targeted policy action, according to a new OECD report presented to the Leaders of the G20 countries at their ... More>>

OECD: GDP Rebounded By 9.0% In The Third Quarter Of 2020 But Remains Below Pre-Pandemic High

Following the unprecedented falls in real gross domestic product (GDP) in the first half of the year in the wake of COVID-19 containment measures, GDP in the OECD area rebounded by 9.0% in the third quarter of 2020 but it remains 4.3% below its pre-crisis ... More>>