Inpex agrees revised Abadi LNG plan principles with Indonesia

Japan’s Inpex Corporation signed a heads of agreement (HOA) with Indonesian authorities on the basic principles regarding a revised Plan of Development (POD) for the Abadi LNG project.

The project involves developing the Abadi gas field in the Masela Block located in the Arafura Sea in Indonesia.

Inpex, as the operator of the project and on behalf of the project’s contractors (Inpex and Shell), has been engaged in discussions with the authorities with the aim of submitting the revised POD, the company said in its statement.

The HOA outlines the terms agreed upon with the authorities following discussions held after the completion of pre-FEED work on a revised POD to achieve an economically competitive project. The cost estimation in the revised POD of the project which will include the construction of onshore LNG plant, gas pipeline, and offshore facilities, is contained in the agreed terms of the HOA.

The signing of the HOA acknowledges agreement between the parties of a revised POD that is sufficiently economically competitive. Inpex will now commence the process of submitting the revised POD for approval as well as amending and extending the Masela Block production sharing contract (PSC).

Inpex said it will continue to work closely with its partner Shell to make the necessary preparations to commence FEED work after receiving approval of the revised POD and reaching an agreement with the authorities on the PSC amendments and extension.

The project is the first large-scale integrated LNG development project operated by Inpex in Indonesia and follows on from the Inpex-operated Ichthys LNG project in Australia.

The project is expected to produce approximately 9.5 million tons of LNG per year. The Abadi gas field features excellent reservoir productivity and has one of the world’s largest reserves, raising expectations of efficient development and stable LNG production operations over the long-term, Inpex said.