Demand for natural gas for china is massive ,china gas states...

Demand for natural gas for china is massive ,china gas states demand is staggering ,i think we are in great position to bring our gas to market quickly with a deal with cop .

japanS thirst for LNG is showing with tokyo electric possibly buying in to the inpex corps itcthys fields .

July 24 (Bloomberg) -- Tokyo Electric Power Co., Asia’s largest utility, may buy a stake in Inpex Corp.’s $20 billion liquefied natural gas project in Australia to secure supplies of the cleaner-burning fuel.

The utility aims to complete talks this year to purchase around 1 percent of the Ichthys venture, Arai Takao, a managing director in charge of fuel procurement, said in Tokyo yesterday. Tokyo Electric and six other Japanese utilities may each buy about 1 million metric tons a year from the project, he said.

“Becoming a stakeholder will benefit us as we can get access to information on production planning and timing, which is difficult to get if you’re merely a buyer,” Arai said.

Inpex has been wooing Japanese LNG buyers to join the Ichthys project to lock in customers. Ichthys, which Inpex estimates will produce at least 8 million tons a year, is one of about 10 proposed ventures in Australia and Papua New Guinea seeking to tap forecast growth in LNG demand in Asia.

“The primary market for the Ichthys project is Japan,” Inpex spokesman Kazuya Honda said by phone from Tokyo today, while declining to comment on whether Tokyo Electric is negotiating to buy a stake.

Such a purchase “profits both sides,” Reiji Ogino, an analyst at Mitsubishi UFJ Securities Co., said by phone. “Securing stable customers like Tokyo Electric will hedge investment risk and increase the feasibility of the project.”

Ichthys, which is expected to produce gas for 40 years, is slated to begin operation in 2015, Inpex said in April. The explorer and Paris-based partner Total SA, which bought a 24 percent stake in 2006, will decide whether to go ahead with the project next year.

Share Performance

Arai didn’t say how much Tokyo Electric would pay for a stake, saying an offer hasn’t been made yet. The sale to Total boosted Inpex’s before-tax profit by about 33 billion yen ($348 million.)

Tokyo Electric shares have lost 14 percent in the last six months, trailing the 20 percent rise in the benchmark Topix Index. The utility fell 0.6 percent to 2,435 yen at the morning break in Japan trading. Inpex has gained 11 percent in six months and traded 2 percent higher at 732,000 yen.

Tokyo Electric, Japan’s biggest LNG buyer, bought 20 million tons of the fuel in the year ended March 2009, accounting for about a third of the country’s imports. It has been burning more gas to make up for the 2007 closure of the Kashiwazaki Kariwa station, the world’s biggest nuclear power plant. The company’s nuclear operating rate was at 43.8 percent in the last fiscal year.

Reactor Restart

Tokyo Electric won approval for commercial operation of a 1,356 megawatt reactor at Kashiwazaki Kariwa on July 22, and is seeking permission to start a second reactor. The plant was shut after an earthquake triggered a fire and radiation leaks.

The company will import about 17 million to 18 million tons of LNG a year over the next decade, Arai said, even if its nuclear operation rate recovers to around 80 percent, as it aims to double natural gas sales to factories in the capital area, challenging the dominant distributor Tokyo Gas. It now sells about 1 million tons a year.

Tokyo Electric relies on Malaysia, the United Arab Emirates and Brunei for about 65 percent of its LNG requirements, according to the company’s data. It may extend a contract for about 4 million tons a year with Brunei that is set to expire in March 2013, Arai said.

“We’ve been informed that the country will tap new gas fields and is capable of renewing the contract,” Arai said.

Tokyo Electric will end contracts with Indonesia when it expires in December 2009 and Alaska when it ends March 2011, he said.

The company buys only 130,000 tons a year from Indonesia and purchases only “three cargoes” a year from Alaska, Arai said. One cargo of LNG typically carries about 100,000 tons.