Japan's Inpex delays FiD on Indonesia's Abadi LNG

Inpex and PT Pertamina partner up for Abadi LNG project

Japan’s Inpex Corporation has signed a Memorandum of Understanding (MoU) with Indonesia’s PT Pertamina on a strategic collaboration to proactively pursue the implementation of the Abadi LNG project in Indonesia.

Archive; Illustration only; Courtesy of Inpex

Through the MoU, Inpex and Pertamina said they will seek to collaborate strategically on a wide range of fields with a focus on the Abadi LNG project’s value chain.

Specifically, the companies intend to pursue opportunities to collaborate on the offtake and transportation of LNG and other products, the production of hydrogen and ammonia and the provision of the needs of local stakeholders. Furthermore, the companies noted they will seek to secure the long-term competitiveness and sustainability of the Abadi LNG project as well as further improvement of project value while generating synergistic effects.

Through its subsidiary Inpex Masela, Inpex is currently preparing the Abadi LNG project for development as an operator in the Masela Block in the Arafura Sea in Indonesia.

The MoU follows the execution of a Sales and Purchase Agreement (SPA) between Shell Upstream Overseas Services Limited, Pertamina Hulu Energi (PHE), a subsidiary of Pertamina, and Petronas Masela Sendirian Berhad, a subsidiary of Petronas, concerning the transfer of Shell’s participating interest in the Abadi LNG project to PHE and Petronas. The transfer is subject to the fulfilment of certain joint venture procedures and is conditional on the approval of the Indonesian government.

To remind, in April 2023, Inpex submitted a revised Plan of Development (PoD) for the Abadi LNG project, incorporating a carbon capture and storage (CCS) component to the Indonesian government authorities, as well as plans to revise the Production Sharing Contract (PSC) to reflect the incorporation of CCS following approval of the PoD.


Going forward and upon completion of the interest transfer, Inpex informed it plans to resume project activities. It said it will proceed with the preparations required to reach a final investment decision (FID), including front-end engineering and design (FEED) work and marketing and financing activities while ensuring investability.

Abadi LNG project’s annual production volume is expected to reach 9.5 million tons, equivalent to more than 10% of Japan’s annual LNG imports, Inpex noted, adding that by adopting CCS, it will aim to secure a stable supply of clean energy over the long term and contribute to improving energy security in Indonesia, Japan and other Asian countries.

Furthermore, the project is expected to contribute to economic development in the eastern part of Indonesia as well as the Indonesian government’s goal of reaching net zero CO2 emissions by 2060.

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