Inpex, Indonesia agree on main points for $20B Abadi gas field development
Indonesia’s giant Abadi gas field in the Arafura Sea might finally be developed, almost two decades after the discovery made by Japan’s oil and gas company Inpex.
The Indonesian energy ministry said this week that the energy minister had met on Monday with Inpex CEO where “a number of strategic points were successfully agreed upon, which should enable this giant gas field to be developed.”
The ministry said that the parties had earlier in May reached an agreement on the final plan of the development framework. The meeting on Monday, the ministry said, discussed the details of the framework, so that an agreement between Indonesia and Inpex can be signed soon.
According to the statement by the ministry, the investment value of the development should reach $20 billion. The ministry further said that a “win-win solution” was agreed with regards to the profit sharing scheme “in which the government will receive at least 50 percent.”
The development of the offshore find has been delayed first by Inpex which had its initial FLNG development plan approved by the government in 2010, only for the company to revise the plan in 2015 to include a larger capacity FLNG following the increase of estimated reserves at the field.
After the second submission, the Indonesian government then in April 2016 decided the floating solution was no longer an option, telling the company to go back to square one devise a plan for the Abadi field development via an onshore LNG plant.
Inpex in 2018 conducted Pre-FEED work for an onshore development option with an expected annual production capacity of 9.5 million tons.
The signing of the final agreement between the Government of Indonesia and Inpex Corporation is planned to be held at the G20 countries meeting in Japan, scheduled for June 29-30.
Inpex operates the project, owning a 65 percent stake with the remaining 35 percent stake held by Shell.
According to Japan Times, the Masela block in which the Abadi field is located will be able to produce 1.200 billion standard cubic feet per day of gas and 24,000 barrels per day of condensate for 24 years.
“The facility is scheduled to become fully operational in 2024 and start piping gas in 2026, two years before Inpex’s and Shell’s contracts expire,” Japan Times has reported
Offshore Energy Today Staff
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