The impact of the coronavirus is taking its toll on work for Inpex’s 9.5 million tonnes per annum Abadi liquefied natural gas project in eastern Indonesia.

One of the constraints is the inability this month to carry out as planned two field surveys on Abadi, located on the remote Masela block, although upstream regulator SKK Migas is working with the operator to find a way forward.

“The field survey could not be carried out because of Covid-19. But we are in discussion with Inpex not to back down," said SKK Migas head Dwi Soetjipto.

The surveys, which would have required some 200 workers, are now postponed indefinitely because of social distancing regulations.

Dutch geo-data specialist Fugro had been contracted to perform geophysical and geotechnical surveys and the associated studies needed to support the front-end engineering and design work for the offshore production facilities and the subsea pipeline to the onshore LNG terminal.

Geo-data was to be acquired using Fugro’s deep-water autonomous underwater vehicle Echo Surveyor and its robotic seafloor drill, Seafloor Drill 2, deployed from Indonesian support vessels.

Inpex —headed by chief executive Takayuki Ueda — has also been unable to hold its usual public information meetings that would have preceded these surveys because of physical distancing measures.

Another looming potential obstacle to the project’s timely progression is the failure to sign up customers for the project’s LNG and gas — a process that is being exacerbated by the latest oil price crash, according to Dwi.

“Another challenge is marketing... still constrained by prospective buyers... they wait and see," Dwi said last week in a virtual hearing with the government’s Commission VII, which oversees energy matters.

Inpex had been expected by early 2020 to be progressing the FEED tenders for the main elements of the Abadi project. One or more of these contracts could roll over into the engineering, procurement and construction workscope.

On the table are expected to be FEED contracts for a large floating production, storage and offloading vessel; the onshore liquefaction plant; offshore gas export pipeline; and the subsea umbilicals, risers and flowlines package.

Despite the delays wrought by the current market uncertainty, SKK Migas hopes Inpex will take a final investment decision for Abadi LNG in the fourth quarter of 2022, with construction set to start the following year.

Japan’s Inpex operates the project with a 65% stake, with Shell holding the remaining 35%.

LNG

Survey and sales issues threaten Abadi schedule