Abadi LNG to move to pre-FEED as Inpex agrees to push project

JAPANESE operator Inpex has agreed to speed up development of its Abadi liquefied natural gas project in Indonesia, writes Amanda Battersby.

Indonesia’s Minister of Energy & Mineral Resources, Ignatius Jonan, this week met with Inpex chief executive Toshiaki Kitamura in Tokyo. Ignatius formally requested that Inpex immediately start discussions with Indonesia’s upstream regulator SKK Migas regarding pre-front-end engineering and design work to develop the giant Abadi gas field on the Masela production sharing contract.

Kitamura expressed his company's readiness to immediately start the pre-FEED phase, the ministry said in a statement. Discussions with SKK Migas will need to focus on issues including on the pre-FEED implementation, production capacity of the onshore liquefaction project and the plant’s location.

Ministry officials say that three location options, likely on either Aru or Saumlaki Island, remain on the table.

“The government has no specific preference regarding location,” said Ignatius, adding that Kitamura agreed that the location would be determined before the project enters the FEED stage.

Inpex and 35% partner Shell are understood to be considering two capacity options for Abadi LNG — either 7.5 million or 9.5 million tonnes per annum — both likely two-train developments. The smaller scale would leave more pipeline gas available for local customers.

The Indonesian government is still hoping that the grassroots LNG project to exploit Abadi’s 10 trillion cubic feet-plus gas resource will be up and running by 2023 although this timeline might prove too ambitious, according to some sources.

Up for discussion with SKK Migas is also the not unimportant matter of a new contract for Masela — the existing PSC is due to expire in 2028.

Ignatius also met with management of Mitsubishi, Tokyo Gas, Itochu and the Japan Bank for International Co-operation during his three-day visit to the Japanese capital city.