The onshore Abadi LNG project, which will have an annual production capacity of 9.5 million tonnes, is slated to begin production in the latter half of 2020s


Image: Location of the Abadi LNG Project. Photo courtesy of INPEX.

Japanese oil and gas firm INPEX has submitted a revised plan of development (POD) for the $15bn (£11.8bn) Abadi LNG project in Indonesia to federal authorities.

Revised POD of Abadi LNG project

As per the revised POD, INPEX proposes to develop an onshore LNG project with an annual production capacity of 9.5 million tonnes of liquefied natural gas (LNG). The project, which is being executed through its subsidiary INPEX Masela, will involve development of the Abadi gas field contained in the Masela Block in the Arafura Sea.

In April 2016, Indonesian authorities asked INPEX to resubmit a new development plan for the project, based on an onshore development scheme. Originally, the Japanese firm in September 2015 proposed to develop a floating LNG plant with a capacity to process 7.5 million tonnes of LNG annually.

INPEX is the operator of the integrated LNG project with a stake of 65% and is partnered by Royal Dutch Shell, which holds the remaining stake of 35%.

Shell Abadi vice president Li P’ing Yu said: “Shell is pleased with the progress made by the Joint Venture, led by INPEX as operator, towards the development of the Abadi project. The submission of the revised POD is a significant milestone for the project, which advances the Joint Venture closer to delivering a major National Strategic Project for Indonesia.”

The Abadi LNG project will also see the construction of an onshore LNG plant, a gas pipeline, and offshore facilities.

Earlier this month, INPEX signed a heads of agreement (HOA) with Indonesian authorities on the basic principles pertaining to the revised POD. The HOA covers the terms agreed upon by the parties after their discussions post completion of Pre-FEED work on the revised POD to develop an economically competitive project.

INPEX Masela president Shunichiro Sugaya said: “The submission of the revised POD for an onshore LNG development scheme based on the Heads of Agreement signed on June 16, 2019 is a major milestone for the Project.

“INPEX anticipates that the revised POD will be approved at an early stage, after which the company will work in partnership with Shell toward reaching FID and ultimately commencing production, with the cooperation of the Government of Indonesia.”

INPEX said that it will continue to closely work with Shell to make the required preparations to start FEED work for the Abadi LNG project at an early stage after getting approval for the revised POD. The Abadi LNG project is targeted to begin production in latter half of 2020s.