Japanese gas giant INPEX offers solution to shortages: turn on the tap

Japanese gas giant INPEX has urged Anthony Albanese not to sacrifice Australia’s position as a ‘reliable and trustworthy’ energy exporter to secure domestic LNG supplies.

INPEX’s Ichthys LNG project.

Japanese gas giant INPEX has urged Anthony Albanese not to sacrifice Australia’s position as a “reliable and trustworthy” energy exporter to secure domestic LNG supplies, arguing the “simple solution” to looming shortages is to bring new gas projects on line.

As the government scrambles to avert an east coast gas crisis, INPEX chief executive Takayuki Ueda warned shifting the regulatory goalposts for its Ichthys LNG project in the Northern Territory would have a “negative effect” on the company’s future investments. Mr Ueda met the Prime Minister, cabinet members and senior bureaucrats in Canberra this week amid a government review aimed at securing affordable gas supplies.

He said INPEX had two key requests of the government as it considered regulatory changes for the $90bn sector: “Existing contracts should be respected. And retrospective applications of new regulation should be avoided.

“Australia has two goals. One is to ensure the energy supply ­domestically. That is of course ­important. But at the same time, Australia has the important role of ensuring energy security in the Asian region, including Japan. From our side, we want to import LNG from reliable and trustworthy countries.”

INPEX chief executive Takayuki Ueda. Picture: John Feder

In a veiled swipe at Victoria and NSW’s refusal to approve new gas projects, Mr Ueda said ­domestic and international customers expected supply-side ­improvements.

“One simple solution, I may say, is just increase the supply. Increase the production of gas in this country. There is a large resource in this country, in Victoria, in NSW,” he said.

“Why don’t you increase production, which could solve the domestic gas production issue? ­Increasing supply is the expectation of many domestic ­customers, and international customers.”

Mr Ueda also called for the streamlining of environmental approvals amid an Albanese government push to rework Labor’s reforms to the Environment Protection and Biodiversity Conservation Act by the end of the year.

He said the company’s Bonaparte carbon capture and storage project was hanging in the balance, requiring 125 separate regulatory approvals.

“It’s too much. If the current approval schedule continues, it will take nine years for us to finally get the approval,” he said. “Nine years does not just mean the delay of the project. Nine years means no project.”

The INPEX boss sent a shot across the government’s bow two years ago when he accused Australia of “quiet(ly) quitting” the gas industry.

He said he was more upbeat now, arguing there was a wide acknowledgment there would be no rapid energy transition to renewables, while LNG demand could double by 2050.

“At this moment, in terms of gas, every minister seems to very much understand the importance of gas, and the importance of foreign investment, and the importance of streamlining regulatory processes,” Mr Ueda said.

He argued there was a strong environmental imperative in ramping up gas production, with Australia’s LNG exports offering Asian countries the ability to shift away from coal-fired power.

Over the next decade, INPEX aims to open a third LNG processing train at its LNG processing facility in Darwin. It argues its CCS investments will drive a 60 per cent reduction in the carbon intensity of its operations.