Japan, surpassed by China as the world's second-largest economy, has one advantage in competing with its neighbor for natural resources: lower borrowing costs.

Inpex Corp., the nation's biggest energy explorer, may need to raise $17 billion to finance the $20 billion Ichthys liquefied natural gas field in Australia, said Takeshi Sasaki, a director at Credit Pricing Corp. in Tokyo.

Inpex may fund the development at less than half the 4.5 percent that Chinese rival Cnooc Ltd. paid on 10-year notes sold Friday, based on benchmark rates.