INPEX has signed a Heads of Agreement (HOA) with Indonesian authorities on the basic regarding a revised Plan of Development (POD) for the Abadi LNG Project. The project involves developing an onshore LNG plant, gas pipeline, and offshore facilities in the Abadi gas field in the Masela Block located in the Arafura Sea in Indonesia.
INPEX, as the operator of the project and on behalf of the project’s contractors (INPEX and Shell Upstream Overseas), has been engaged in discussions with the authorities with the aim of submitting the revised POD.
The HOA outlines the terms agreed upon with the authorities following discussions held after the completion of Pre-FEED work on a revised POD to achieve an economically competitive project.
INPEX will now commence the process of submitting the revised POD for approval as well as amending and extending the Masela Block production sharing contract (PSC).
“The execution of the Heads of Agreement, which follows a series of constructive discussions with the Indonesian government, positions the Abadi LNG Project as an economically competitive project by international standards. INPEX appreciates and values the proactive intervention of His Excellency Ignasius Jonan, Minister for Energy and Mineral Resources and the Indonesian government, and looks forward to maintaining close and cooperative relations,” said Takayuki Ueda, President & CEO of INPEX, who attended the signing.
Commenting on the signing, Clare Harris, Shell’s Executive Vice President, Venture Development said: “The Heads of Agreement is a significant milestone in the development of the Abadi project, an important economic opportunity for Indonesia. We look forward to continuing our collaboration and support of INPEX as the Joint Venture aims to develop a competitive project.”
The project is the first large-scale integrated LNG development project operated by INPEX in Indonesia and follows on from the INPEX-operated Ichthys LNG Project in Australia. 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. The project will provide significant contributions to the Republic of Indonesia and bring multiplier effects to Indonesia particularly in the eastern region.
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