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As Asia develops to become a huge market in both the production and consumption of oil and LNG, Singapore seems to be turning into the region’s main trading hub. Japan’s largest oil and gas explorer, Inpex Corp., has opened up a new office in Singapore in order to market its rising output of crude oil, condensate, and LNG.
Inpex’s decision is just another sign of the growing trend for oil and gas producers to try and take a more active role in the market, in an attempt to cut out the middlemen and sell their products directly to the consumers. Singapore allows Inpex access to a larger pool of traders than it would have access to at home, especially as Japan’s market for oil is shrinking.
Last year, Mitsui & Co, a large Japanese trading company, and TonenGeneral, a Japanese refiner and oil transporter, both moved their trading offices to Singapore.
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Inpex has moved its office in order to benefit from a larger number of traders as it prepares for an increase in production over the next few years thanks to the multi-billion dollar LNG project in Australia. When the Icthys project is finally ready to begin production around the end of 2016, Inpex is expecting its oil and gas production to jump by around 66% to nearly 700,000 barrels of oil equivalent a day.
Reiji Ogino, a senior analyst at Mitsubishi UFJ Morgan Stanley Securities, explained to Reuters that the office in Singapore will also make it easier for Inpex to buy LNG, which can be delivered to its new Naoetsu LNG import terminal in Joetsu City, Niigata Prefecture, until Icthys is ready to begin production.
Ogino said that “Inpex has emerged as an importer with the start-up of the Naoetsu LNG receiving terminal this month.”
The Naoetsu LNG terminal is part of the expansion of Japan’s LNG network, it has two large LNG storage tanks which can each hold 180,000 kilolitres, and has the capacity to receive about 1.5 million tonnes of LNG a year. LNG is expected to become a major source of energy for Japan as it continues to recover from the loss of its nuclear power sector.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com