Australia wants Inpex to bring Abadi Gas to Darwin

Australia wants Inpex to bring Abadi Gas to Darwin

Angela Macdonald-Smith and Megumi Yamanaka, Bloomberg/Sydney/Tokyo

Australia's Northern Territory government wants Inpex Ltd., Japan's biggest oil explorer, to bring gas from its undeveloped Abadi field, which lies in Indonesian waters, to northern Australia for processing.

Bringing gas to northern Australia from the field, which may contain more than five trillion cubic feet of gas, would create "an opportunity," Andrew Andrejewskis, director of petroleum developments at the Northern Territory's Office of Territory Development, said on Tuesday.

Tokyo-based Inpex owns 10.5 percent of ConocoPhillips's Bayu- Undan gas venture, which is building a liquefied natural gas plant in Darwin, capital of the Northern Territory. The plant will have a capacity of about three million tons a year, though the government has approved the site for LNG capacity of up to 10 million tons a year.

"We're interested in doing a deal with Inpex to bring Abadi gas onshore," Andrejewskis said at a breakfast meeting at the Australian Petroleum Production and Association conference in Perth. "We think one of their best options is to bring it into Darwin," he said later in an interview.

The Japanese oil explorer plans further appraisal drilling at the Abadi field late this year, he said.

Inpex has not decided yet whether or how it will develop the Abadi field, said Akihiro Watanabe, manager of the company's business planning division.

"We are still doing appraisals on whether to develop the fields or not," he said by telephone in Tokyo on Tuesday. Watanabe declined to comment on when Inpex will come to a decision.

Construction of the Darwin LNG plant is more than 50 percent complete, Andrejewskis said. The pipeline being built to take Bayu-Undan gas from the Timor Sea field to Darwin will be connected into the offshore production system during a planned six-week shutdown of the gas liquids plant for maintenance, which is due to begin "shortly," he said.