INPEX received government approval for the revised development plan for its long-delayed Abadi liquefied natural gas (LNG) project in eastern Indonesia.
The Japanese energy company submitted the revised plan to Indonesian government authorities on 4 April 2023, incorporating a carbon capture and storage (CCS) component into the existing development plan.
The company said in a press release that the project would be the first in which CCS-related costs are eligible for recovery based on the production-sharing contract (PSC) that governs crude oil and natural gas upstream operations in Indonesia.
Approval of the revised development plan “paves the way for INPEX and its partners to fully mobilize the project as a clean project in support of the energy transition."
INPEX and its project partners plan to amend the PSC to incorporate CCS into the contractual scope of work, resume project operations, including on-site activities, and prepare for front-end engineering and design work.
Abadi is in the Masela block, 150 km offshore Saumlaki in Maluku province, Indonesia. It is estimated to hold nearly 10 Tcf of recoverable natural gas reserves.
The annual LNG production volume for the project is expected to reach 9.5 mtpa, equivalent to more than 10% of Japan’s annual LNG imports,and up to about 35,000 bbl of condensate daily. The project will also supply 150 MMcf/D of natural gas via pipeline to address local demand.
INPEX holds a 65% operating interest in Masela PSC and is the operator of the Abadi gas project. Pertamina holds a 20% operating interest, and Petronas Masela holds a 15% operating interest. The two companies officially became partners in the Abadi LNG project on 18 October 2023, following the completion of the conditions precedent under the sales and purchase agreement on the transfer of Shell’s participating interest.
