Inpex, Shell ready to start Abadi LNG feed work

Japan’s Inpex Corporation, in cooperation with its partner Shell is set to begin the preparations to commence front-end engineering design (FEED) for the Abadi LNG development in Indonesia. 

The comment follows the official approval of the revised plan of development for the Abadi LNG project by the Indonesian authorities.

In addition to the revised POD, the authorities also approved the application for a seven-year additional time allocation and a 20-year extension to the Production Sharing Contract (PSC) for the Masela Block, extending the term of the PSC until 2055, Inpex said in its statement.

“The approval of the revised POD by the authorities is a significant milestone for the Abadi LNG project. While the project’s development concept has been changed from a floating LNG scheme to an onshore LNG scheme, I am confident that the economics of the project based on the revised POD are now sufficiently strong for Inpex and Shell given the PSC term until 2055 and sufficient financial conditions have been secured following a series of constructive discussions with the authorities,” said Takayuki Ueda, president & CEO of Inpex.

He added that the company aims to make this project competitive and will continue to work toward the production startup scheduled in the latter half of the 2020s.

In terms of preparations, Inpex said these will consist of the mobilization of operational personnel and bidding-related work for the selection of contractors undertaking the FEED work.

A final investment decision (FID) is subject to a series of subsequent evaluations including FEED work.

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.