* Joins other Japan firms in making city-state a trading hub
* To market new crude, condensate, LNG output from
* To grow buyers' pool in Asia as Japan's demand shrinks
By Florence Tan and Osamu Tsukimori
SINGAPORE/TOKYO, Dec 12 Japan's top oil and gas
explorer Inpex Corp has set up an office in Singapore
to market its rising output of crude and condensate and trade
liquefied natural gas (LNG), sources said.
The Singapore trading office will provide Inpex, which
traditionally sells its output into Japan, with access to a
bigger pool of buyers and sellers beyond its home market where
oil demand is shrinking.
Inpex's move is part of a growing trend of oil and gas
producers taking a more active marketing approach by selling
products directly to consumers.
Trading company Mitsui & Co and refiner
TonenGeneral moved their oil trading functions to Asian
oil hub Singapore from Japan last year.
Inpex is readying for a jump in production in the next few
years, mainly from a multi-billion dollar LNG and condensate
project in Australia. It is also expanding its LNG network in
Japan to meet rising power generation demand.
The company expects its oil and gas production to jump more
than two-thirds to around 700,000 barrels of oil equivalent per
day (boepd) when the Australian Ichthys project starts up in
late 2016, from 408,000 boepd in the year ended in March.
With a trading post in Singapore, it could be easier for
Inpex to buy LNG to feed its new receiving terminal until
Ichthys starts up, said Reiji Ogino, senior analyst at
Mitsubishi UFJ Morgan Stanley Securities.
"Inpex has emerged as an importer with the start-up of the
Naoetsu LNG receiving terminal this month," he said.
"Spot (trading) is not the (company's) first priority, but
this has widened its choices."
The Naoetsu terminal in Niigata prefecture in northwestern
Japan has two LNG tanks, each with storage capacity of 180,000
kilolitres, and has capacity to receive and regas about 1.5
million tonnes per annum of LNG.
Inpex spokesman Tetsuji Yoshimine declined to comment.
Inpex owns more than 60 percent of the Ichthys LNG complex
which can produce 8.4 million tpy of LNG, 1.6 million tpy of
liquefied petroleum gas and about 100,000 barrels per day (bpd)
of condensate at its peak, the company said on its website.
FALLING OIL DEMAND
Japan is expected to use less oil in the future due to
improving fuel efficiency, population decline and a drive toward
The country's oil product demand is projected to fall by an
average 1.9 percent annually through 2030-31, the government's
energy committee under the Ministry of Economy, Trade and
Industry said last year.
Other than Ichthys, Inpex has a 7.56 percent stake in
Kazakhstan's giant Kashagan oilfield although output was halted
this year due to a pipeline leak and a restart date remained
The upstream explorer has equity share of crude and
condensate from Abu Dhabi, Indonesia, Australia and East Timor.
It started selling Angolan Nemba crude this year.
Inpex has targeted doubling its output to 1 million boepd by
2020-2025. The company is also partnering China's CNOOC
and JGC Corp in Aurora LNG, one of several
proposed LNG terminals on Canada's west coast.
(Editing by Muralikumar Anantharaman)