Latest news with #Inpex
Business Times
21-05-2025
- Business
- Business Times
US LNG loses ground in Asia as tariffs, politics stall Alaska megaproject
[SINGAPORE] Asian energy buyers are rethinking their long-term bets on US liquefied natural gas (LNG) – increasingly seen as a geopolitical lever – as tariffs, political risk and volatile costs cloud the appeal of the US as a reliable trading partner. Experts say this shift could open the door to rival exporters, as Asia moves to diversify its supply sources. Underscoring this is a once-flagship US$44 billion Alaska LNG project – revived under US President Donald Trump and pitched as a fast-track export route to Asia – which is struggling to secure regional backing, despite being used as a bargaining chip during the 90-day tariff pause since Apr 9. While reports indicate that US' allies such as Japan and South Korea have expressed interest in participating in the project, no financial commitments have yet been made by any Asian buyer. This underscores broader hesitancy amid Washington's protectionist turn and rising infrastructure costs, experts say. Sanjeev Gupta, EY-Parthenon Asia-Pacific oil and gas leader, said that the LNG market dynamics have changed. While in the past, countries such as Japan and South Korea were willing to pay a premium for the security of supply from a single LNG source, current market conditions benefit those with a multi-source supply. 'The current landscape favours companies that embrace a flexible trading strategy and optimise their global portfolios, allowing them to capture economic rents more effectively,' he added. Industry players have also long questioned the project's profitability. At an earnings briefing this month, Daisuke Yamada, senior managing executive officer at Japan's oil major Inpex, said the Alaska LNG project is 'extremely difficult to make profitable', noting that construction on frozen terrain is limited to only parts of the year. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The proposed project – a 1,300 km natural gas pipeline stretching from the North Slope to Nikiski – aims to commercialise natural gas reserves discovered in 1969. Since its inception, the project has been targeting Asian buyers with its Nikiski terminal offering faster shipping access to Japan, South Korea, Taiwan and South-east Asia. Source diversification In 2024, the US accounted for over 10 per cent of total LNG imports in Japan, South Korea and Taiwan, making it the region's third-largest supplier. In March, Taiwan's state-owned CPC Corporation signed a non-binding letter of intent to purchase six million tonnes annually from Alaska LNG – more than its total LNG imports from the Middle East (Qatar, United Arab Emirates, Oman) – in a bid to strengthen ties with the Trump administration. One observer described Taiwan's LNG deal with Alaska as a political rather than economic move, noting that the island already imports substantial volumes from Qatar – one of its top suppliers and a global leader in low-cost production. According to a Reuters report citing a source, Trump's energy security council plans to host a summit in Alaska in early June, when it hopes to secure commitments from Japan and South Korea for the Alaska LNG project. With the Alaskan project likely to yield more expensive LNG, Asian buyers are shifting towards a diversified sourcing strategy to meet growing demand. Gupta expects a diverse range of LNG sources as the LNG demand in Asia continues to grow at an annual rate of about 5 per cent. 'While the recent 90-day trade truce between the US and China has provided temporary relief, long-term uncertainty persists for the energy sector. Some major Chinese energy firms are exploring opportunities with Middle Eastern suppliers, signalling a strategic shift to diversify and de-risk their sourcing strategies,' he said. A Singapore-based LNG trader told The Business Times that Chinese buyers have long lost interest in US LNG given the geopolitical risk premiums, and are selling off leftover US contracts to Europe instead. Asia Natural Gas & Energy Association's chief executive officer Paul Everingham, however, noted that US LNG will continue to play an important role in Asia's energy mix amid rising demand. A 2024 study by Wood Mackenzie forecasts that US LNG would make up a third of global supply by 2035 – if planned and proposed projects are developed – while Asia's LNG demand is expected to nearly double to 510 million tonnes per annum in 2050, as emerging nations seek a cleaner fuel than coal for power generation. Given LNG's pivotal role, South-east Asian buyers are exploring ways to manage price volatility and rising costs. This includes Singapore's move to establish a centralised LNG purchasing entity to leverage economies of scale and enhance trading capabilities to reduce supply risks. As Vietnam, the Philippines and Thailand face declining domestic gas production, these countries are also actively seeking to engage with international markets for LNG supplies. Funding woes While Everingham expects the continued expansion of US LNG production to moderate global prices, export growth is clouded by an increasingly challenging funding environment – particularly following the imposition of 25 per cent global tariffs on aluminium and steel since Mar 12, which together account for about 30 per cent of LNG infrastructure costs, according to Rystad Energy. In fact, the new tariff regime has significantly undermined the US investment environment by fuelling uncertainty, Rystad's LNG market analytics team remarked. 'Developers will face increased difficulty finding financial backing for these long-term projects that often take over a decade to recoup costs,' the team reckoned, adding that eight projects expected to reach final investment decisions (FIDs) within the next three years are now at risk. Experts also expect waning interest in US LNG from Asian buyers, as higher capital costs driven by steel and aluminium tariffs will likely push developers to seek higher prices in offtake contracts, and potentially price US supply out of key markets. 'This is particularly the case for Asia, where buyers remain hesitant to commit to long-term US contracts given that LNG demand is price-sensitive in many East Asian emerging economies, and the added complication of shipping routes through the Panama Canal or around the Cape of Good Hope,' said Rystad. Such hesitation, coupled with eroding trust in the US as a reliable long-term partner, has opened the door for more geopolitically stable competitors to secure long-term contracts, it said. A key beneficiary could be Canada, given its expanding export capacity.
ABC News
18-05-2025
- Politics
- ABC News
NT government's closed recruitment for territory coordinator role faces criticism
The Northern Territory government has faced criticism over its move to hand a former gas executive "extraordinary powers" to green-light private development, without publicly recruiting for the "highly-paid" position. Last Thursday, Stuart Knowles was appointed as the first territory coordinator, gaining a four-year term after acting in the role since November. The government passed new laws to create the position in March, and it comes with sweeping powers to "consolidate regulatory processes" for projects of "economic significance". Mr Knowles, a former NT Inpex boss, now has the ability to issue "step-in notices" and take over some assessments from other approval bodies. He gains powers to override dozens of NT laws, including those regulating the environment, pastoral land, petroleum, heritage and water. Opposition Leader Selena Uibo said the "high standards expected of the public service" had not been applied in the government's appointment of Mr Knowles, claiming there was no open recruitment for the role. "The Labor opposition is struggling to find the process that has been used to appoint Mr Knowles in this highly-paid taxpayer position for four years," she said. "What vetting processes were afoot, what open recruitment process has the CLP government followed? "So far it looks like none." A government spokesperson said a selection panel undertook a "formal assessment process" before Mr Knowles was appointed territory coordinator on Thursday. In a statement, Mr Knowles said that process assessed his "private and public sector strategic project experience, and qualifications in management, auditing and corporate governance". The government declined to answer multiple ABC requests for information on how much Mr Knowles would get paid in the role, nor whether it considered other candidates. Labor's questioning in parliament last week also centred around media reports by the NT Independent that Mr Knowles was investigated by NT Animal Welfare for animal neglect 10 years ago. During the investigation, four dogs were seized and taken to a vet for treatment, with a warning issued to Mr Knowles. Mr Knowles said in a statement he took full responsibility for the "unintended" animal neglect. "I am deeply sorry for the distress caused to my dogs due to the tick infestation on my property a decade ago," he said. "I deeply regret my failure to prevent it." Mr Knowles said during the investigation, animal welfare officers attended his property three times in six weeks to assess the dogs' condition. "After confirming that remedial actions, including tick eradication treatments, were successful and the dogs were in good health, they concluded their investigation," he said. Independent MLA Justine Davis has also raised concerns about Mr Knowles's appointment, saying parliament members know little about how he was chosen for the role. "There are open questions about his fitness for the role, the integrity of the recruitment process that led to his appointment, and ongoing concerns about potential conflict of interest — actual or perceived — Mr Knowles may have given his prior work with Inpex," she said. Ms Davis said the role's selection criteria — which the new laws limit to "suitable qualifications or experience" relating to the territory coordinator's functions — were "totally inadequate". She said the legislative scrutiny committee, which she was part of, recommended the job criteria exclude government or judicial officials and people who had donated to a political party in the past. However that request was rejected, along with another recommendation that the territory coordinator's appointment should require the parliament's endorsement. "It remains difficult to understand why the CLP would object to basic integrity standards for powerful public service roles like the territory coordinator," Ms Davis said. Mr Knowles worked in the Department of Chief Minister and Cabinet prior to joining Inpex as a compliance approvals manager in 2014. He went on to become the gas giant's NT general manager, and later worked for a consulting firm before he took on the territory coordinator role. Chief Minister Lia Finocchiaro said Mr Knowles had "extensive" public and private sector experience and an "understanding of the Northern Territory's unique challenges and opportunities". Last week the government was also criticised for making a "captain's pick" appointment of Legal Aid NT's new director — which prompted a string of resignations from the organisation's board.
CNBC
16-05-2025
- Business
- CNBC
UAE to up value of U.S. energy investments to $440 billion by 2035
The United Arab Emirates plans to raise its energy investments in the United States to $440 billion in the next decade, it said on Friday, boosting U.S. President Donald Trump's efforts to secure major business deals on a Gulf tour. The wealthy oil power's strategy — which aligns with global growth ambitions for its companies — was announced during a presentation by Abu Dhabi oil giant ADNOC's CEO Sultan Al Jaber to Trump during the last stage of the president's regional trip. The visit has drawn huge financial commitments to the U.S. from the UAE, Saudi Arabia and Qatar. The enterprise value of UAE investments in the U.S. energy sector will rise to $440 billion by 2035 from $70 billion now, Al Jaber told Trump, adding that U.S. energy firms will also invest in the UAE. "Our partners have committed new investments worth $60 billion in upstream oil and gas, as well as new and unconventional opportunities," Al Jaber said. The amount will be invested over the lifetime of projects, ADNOC said in a statement. Exxon Mobil and Japan's Inpex have agreed a deal to expand the capacity of Abu Dhabi's Upper Zakum offshore field, while Occidental Petroleum (Oxy) will explore boosting the capacity of the Shah gas field and EOG Resources has won an oil exploration concession in Abu Dhabi's Al Dhafra region. "The agreements reinforce the shared commitment of the UAE and U.S. to maintaining global energy security and the stability of energy markets," ADNOC said. The $440 billion value of UAE investments in the U.S. was part of a $1.4 trillion investment plan pledged to Washington, it added. That plan will "substantially increase the UAE's existing investments in the U.S. economy" in AI infrastructure, semiconductors, energy, and manufacturing, the White House said in a statement. The two countries also agreed to a deal that will give the UAE access to some of the most advanced artificial intelligence semiconductors from U.S. companies, a major win for Abu Dhabi's efforts to become a global AI hub. "We see significant opportunities for further UAE-U.S. partnerships across the energy-AI nexus, and we look forward to working with our American partners," Al Jaber said in ADNOC's statement. "We're making great progress for the $1.4 trillion that UAE has announced it intends to spend in the United States," Trump said in Abu Dhabi, his last stop on the tour that has focused on investment deals rather than security crises in the Middle East, including Israel's war in Gaza - at least publicly. "Yesterday the two countries also agreed to create a path for UAE to buy some of the world's most advanced AI semiconductors from American companies, a very big contract." Trump said the deal will generate billions of dollars in business and accelerate efforts by the UAE, an oil power and regional economic power, to become a major player in artificial intelligence. "And I read where - the oil and gas and all is great, but you're going to have equally big, and maybe even bigger - at some point, you'll be surpassing it with AI and other businesses," Trump told UAE officials on Friday during his visit. ADNOC's international investment arm XRG is seeking to make a significant investment in U.S. natural gas, Al Jaber, who is also XRG's executive chairman and minister of industry and advanced technology, has said. XRG signed a framework deal with Oxy subsidiary 1PointFive to evaluate a potential investment in a direct air capture project in Kleberg County, Texas, and could commit up to a third of its development cost, ADNOC said in its statement. Other details of the U.S. investment pledge were not disclosed. ADNOC has already transferred stakes in NextDecade's Rio Grande LNG export facility and a planned ExxonMobil hydrogen plant - both also in Texas - to XRG, which was set up last year. According to ADNOC, XRG, which is taking over Germany's Covestro and has agreed with Austria's OMV to merge their petrochemicals businesses Borouge and Borealis, has $80 billion in assets. "The U.S. is a top priority market for XRG," ADNOC said in its statement, adding the firm "is set to boost investments across the American energy value chain, focusing on expanding gas, LNG, specialty chemicals and energy infrastructure". Mubadala Energy, an arm of Abu Dhabi's second-largest sovereign wealth fund, last month signed a deal with U.S. firm Kimmeridge that will give it stakes in U.S. gas assets.
Time of India
24-04-2025
- Business
- Time of India
Japan LNG buyers on edge over Australia policy shifts as election looms
Tokyo/singapore: Gas importers in Japan are watching nervously as Australia heads to the polls on May 3 in a closely contested election, worried that whatever the outcome, their long-time supplier of liquefied natural gas could become less reliable and more costly. Energy has emerged as a major campaign issue in Australia, the world's second largest LNG exporter and Japan's top supplier, facing a gas supply crunch in its east coast market and struggling with rising electricity prices. A widely watched poll has shown the ruling Labor party could retain power with a slim majority. The election could also deliver a hung parliament, with Labor likely forming a minority government. An alliance with the Greens or environment-focused independent candidates could result in a bigger push for renewable energy and less favourable policies to the gas industry. Japanese firms are not only major buyers of Australian LNG but also own stakes in LNG projects, with the biggest investment by Inpex, which runs Ichthys LNG in Darwin. JERA last year bought a 15% stake in the Scarborough LNG project being developed by Woodside Energy off Western Australia. The companies have been rattled by policies implemented by the Labor government, including an extension of gas export controls after energy prices surged following the Ukraine war, and rules requiring big polluters to cut emissions sharply. Those policies have raised supply uncertainty and hiked costs at LNG facilities, Japanese players say. "We recognise their efforts to issue the new gas strategy. But at the same time ... nothing in terms of actions was taken to mitigate the legitimate concerns of the Japanese importers, which is not very helpful for the future in deciding from where we will be purchasing LNG," said Tatsuya Terazawa, chairman and CEO of The Institute of Energy Economics, Japan (IEEJ), an influential energy policy think-tank. The Labor government "has acted to secure gas for domestic users, while remaining a reliable and trusted energy exporter," a government spokesperson said. Adding to LNG buyers' concerns, Australia's opposition Liberal-National coalition has pledged to force east coast exporters to direct some uncontracted gas to the domestic market. Two traders from Japanese importers said this would mean less LNG for export, possibly driving up prices for new term-deals. They declined to be identified as they were not authorised to speak to the media. It could also affect buyer-seller relationships if producers cannot fulfil contractual obligations due to a domestic supply shortage, the traders said. The conservative coalition has said its gas policy would not affect existing contracted volumes. It sees the east coast gas reservation as necessary, because although Australia exports much more gas than it consumes, most of its production is in the northwest, far from the southeast where demand is highest. Japan To Diversify Of Australia's total LNG exports of 81 million metric tons in 2024, over a third was shipped to Japan, according to Kpler data, making up about 40% of Japan's LNG imports. To reduce offtake risks, Japanese buyers say they may turn more to other suppliers. For JERA, Japan's biggest buyer of Australian LNG, it would make sense to diversify "to 'even out' risk and to achieve its overriding goal of reliable, affordable and secure energy supplies," the company said in a LinkedIn post, citing a speech in Perth last month by its senior vice president of LNG, Hitoshi Nishizawa. He urged Australia to make its LNG "more competitive", JERA said, adding that the U.S. would have "abundant and cheaper LNG" in the mid-2030s, when some key contracts to buy Australian LNG are set to expire. Chugoku Electric Power President Kengo Nakagawa told reporters on Friday he would like the next Australian government to ensure stable energy supply and avoid sudden policy changes. Inpex declined to comment on Australian regulations ahead of the election. The poll comes amid a push by U.S. President Donald Trump for Japan to buy more U.S. gas, including from a proposed project in Alaska, while threatening trade tariffs. IEEJ's Terazawa said countries such as the U.S., Canada and Qatar offer alternatives for Japan to meet its LNG demand. "We love Australia and its LNG, but there are other competitors."
Japan Times
17-03-2025
- Business
- Japan Times
Alaskan officials to seek investors in Japan as Trump touts LNG
Alaskan state representatives will visit Japan this month to court investors for a natural gas project that U.S. President Donald Trump says could pump trillions of dollars into the United States, but Japanese energy firms remain skeptical of the project's feasibility. Officials from the state-run Alaska Gasline Development Corporation (AGDC) and development partner Glenfarne Group will visit "allied Asian nations in late March to update industry leaders on Alaska LNG's economic and strategic competitive advantages, and discuss opportunities for participation," said AGDC spokesperson Tim Fitzpatrick. They want to transport natural gas south from Alaska's remote north via a $44 billion 1,300-kilometer pipeline, to be shipped as liquefied natural gas (LNG) to Japan, South Korea and Taiwan. Alaska Gov. Mike Dunleavy said last week that exports could begin by 2030 from a project that could deliver about 3.5 billion cubic feet (99.1 cubic meters) of gas per day. Trump is pushing energy sales to Asian allies while threatening trade tariffs, reviving Alaska's stalled LNG ambitions. On Feb. 7, he asked Prime Minister Shigeru Ishiba for support and on March 4, South Korea agreed to discuss the project. The same day, Trump told Congress that Japan and South Korea wanted to partner on Alaskan LNG. Trump's support will be "helpful to the accelerated advancement of the project," Glenfarne said in an email. South Korea's industry ministry said AGDC had asked for a meeting, but that nothing has been decided. Despite Trump's claim that Japan wants in, Japanese energy firms have yet to commit. "Companies are interested in it, but still have a lot of reservations. Higher cost has been a focal point" for Alaska for years" said Hiroshi Hashimoto, a senior analyst at the government-affiliated Institute of Energy Economics. Potential investors include Japan's biggest oil and gas explorer Inpex, trading firms Mitsubishi and Mitsui & Co., top LNG buyer JERA, and the government's Japan Organization for Metals and Energy Security (JOGMEC) and the Japan Bank of International Cooperation, which finance overseas energy projects, two sources familiar with AGDC's outreach said on condition of anonymity. "The question is whether it can be economically sustainable," Inpex CEO Takayuki Ueda said at a briefing last month. Alaska's extreme cold and the pipeline's scale had hindered progress, he added. The government, Inpex's largest shareholder, has not given any guidance on Alaska, a company spokesperson said. The companies, including Inpex, and the banks declined to say whether they will meet the Alaskan representatives in Tokyo. Meanwhile, diplomatic pressure on Ishiba to ease trade frictions with U.S. gas imports looks set to intensify. "Japan has committed to reduce the trade deficit with us and its reliance on Russia by purchasing U.S. liquefied natural gas. I will hold them to that promise," George Glass, Trump's pick for Japan ambassador, said at his Senate confirmation hearing on Thursday.
