INPEX to use underground gas storage in Japan in case of winter LNG supply hitch

Japan's largest upstream company INPEX said Nov. 5 it will use its domestic underground gas storage facility near its wholly-owned Minami Nagaoka gas field in the northwest as a supply source as part of its contingency plans for the country's winter LNG supply emergency.

INPEX has a 2.3 million cubic meters/day of natural gas supply capacity from using the underground storage facility at its Sekihara gas field, which dried up in 1968, in the north of the Minami-Nagaoka gas field in the times of emergency, a company spokesperson said.

The Sekihara underground gas storage facility connects via pipelines to the Minami-Nagaoka gas field, which is the largest gas field in Japan, producing 5.2 million cu m/day of natural gas.

The Minami-Nagaoka gas field connects to INPEX's Naoetsu LNG import terminal and 1,500 km pipeline from the Niigata prefecture in the northwest to the Kanto region in the eastern Japan, as far away as to Tokyo.

INPEX's move is part of its efforts to ensure Japan's LNG supply during winter after the country experienced a power supply shortage last winter because of high demand during extreme cold spells in January, when local power utilities were forced to restrict gas-fired power generation due to low LNG stocks.

Takayuki Ueda, president and CEO of INPEX, said Oct. 21 that the company will try to squeeze as much "surplus supply" from running and maintaining full operations stably at its LNG plants including at its operated Ichthys project in Australia for winter.

Raising output

INPEX also said Nov. 5 it has raised its 2021 oil and gas production outlook further to 576,000 b/d of oil equivalent due mainly to the eased OPEC+ output cuts, compared with 559,000 boe/d it had expected at the beginning of the year.

Due to the eased OPEC+ output cuts, INPEX said it had produced 640,000 boe/d over July-September, a record-high on a quarterly basis after its output fell during scheduled maintenance at the Ichthys project over May-June, the spokesperson said.

The Ichthys project, in which INPEX has a 66.245% stake with operatorship, is scheduled to have maintenance next at its two LNG trains over July 1-Aug. 5, 2022. The project has the capacity to produce about 8.9 million mt/year of LNG, 1.65 million mt/year of LPG and 100,000 b/d of condensate in Australia.

OPEC and its allies are standing firm on boosting crude output quotas by a modest 400,000 b/d for December, shrugging off intense lobbying from the US and other consuming countries for more volumes to bring surging oil prices down.

With oil demand still under pressure from COVID-19 infections in many parts of the world and expected seasonal weakness as the calendar turns to 2022, OPEC+ ministers on Nov. 4 maintained their previously agreed plan.