Page 5 - GLNG Week 20 2022

GLNG COMMENTARY GLNG

contend with, including how to proceed with its What next?
Russian investments, which are in the spotlight In Inpex’s case, however, the company has
in the wake of the war in Ukraine. sought to downplay its exposure to Russia and
Inpex owns a stake in the Sakhalin-1 oil pro- focus instead on some of its other major projects.
ject and another oil project in Irkutsk in Rus- Inpex said this week that it planned to boost
sia. However, Yamada noted that Russian oil output at the Ichthys LNG project in Australia
accounts for only 1% of the company’s total pro- to 9.3mn tonnes per year in 2024 from 8.9mn
duction, adding that any disruption to Russian tpy today, though Yamada cautioned that any
projects would have a limited impact. immediate increase to respond to tight global
Asked about Inpex’s stance on the projects LNG supply would be difficult to achieve.
amid the ongoing war in Ukraine, Yamada said The company also reiterated its commitment
the company would act in line with its partners, to its planned Abadi LNG project in Indonesia,
including the Japanese government. And the despite the deadline for a final investment deci-
government maintains that there are compel- sion (FID) on that development being pushed
ling reasons to retain Japanese investments in back twice since the second half of last year.
Russia for now. Not least among these is the fact Inpex is now targeting FID on Abadi for the
that any abandoned stakes could be picked up second half of the 2020s, with production start-
by others, including Chinese companies, while ing in the early 2030s.
Japan would be left to source alternative supplies “We had to rethink plans after Shell’s with-
of energy. This is a particular concern on the gas drawal and growing decarbonisation trend ... but
side, with the majority of output from the Sakha- we still want to make the Abadi as the second pil-
lin-2 LNG project going to Japan. lar of our LNG business following the Ichthys,”
Other Japanese companies have taken a Yamada said.
similar line to Inpex in recent days, saying they Shell has been trying to sell its 35% interest in
will follow government policy on their Russian Abadi but these efforts have run into obstacles.
investments, even as they have written down the And Inpex has previously said the project may
value of those assets. At the same time, though, need to be redesigned to incorporate carbon
Japan has agreed with other Group of Seven capture and storage (CCS). The initial delays to
(G7) member countries to bring in a ban on all the deadline for FID were attributed to the coro-
imports of Russian oil. Tokyo has said that it will navirus (COVID-19) pandemic, but there are
take its time phasing out Russian oil imports, but other major challenges that need to be addressed
nonetheless, this adds further uncertainty for before the project can proceed.™
Japanese companies with investments in Russian
energy projects.

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