Malaysia’s national oil and gas company Petronas reportedly has expressed interest to participate in Indonesia’s takeover of Shell’s stake in the Inpex-operated Abadi liquefied natural gas project that has yet to leave the drawing board, Indonesia’s upstream regulator SKK Migas told a Parliamentary hearing in Jakarta on Wednesday.
The Indonesian government earlier said a consortium of its state-owned energy company Pertamina, the Indonesia Investment Authority – the republic’s sovereign wealth fund – and other companies could take Shell’s 35% stake in the Abadi project after the UK supermajor put its interest on the slab.
“Petronas is also interested to join and, if possible, work together with Pertamina in terms of replacing Shell,” Reuters reported SKK Migas chairman, Dwi Soetjipto, as saying.
Upstream has approached Petronas for comment.
Upstream had reported on 8 September that Pertamina was indeed planning to come on board Abadi. The giant gas field offshore Indonesia – recoverable reserves are north of 10 trillion cubic feet - is now envisaged being exploited as a grassroots onshore LNG project.
Pertamina has conducted data room study and is due to submit a non-binding offer to Inpex and Shell this month, Soetjipto added.
Inpex in December is expected to submit a revised Plan of Development for Abadi, which will include a carbon capture and storage scheme. The most recent development concept centred on a floating production, storage and offloading vessel able to handle 1.8 billion cubic feet per day of gas and 36,000 barrels per day of condensate. The two-train onshore LNG project would have nameplate capacity of 9.5 million tonnes per annum.
Shell had paired up with Japan’s Inpex when Abadi was being eyed as a floating LNG project, but this development solution was ultimately vetoed at the highest level by Indonesia’s President Joko Widodo. The Indonesian government believes an onshore development will provide more jobs and economic benefits to the local community and also enable pipeline gas to be available for domestic customers.
The UK partner put its 35% stake in Abadi up for sale in 2019, prior to the Covid-19 pandemic, with a price tag understood to have been up to $1.6 billion at the time.
“It is hoped that in line with [Inpex’s new plan], the new partners could also be decided,” Soetjipto said.