Inpex inks MoUs for long-term gas supply from Abadi project

February 20, 2020, by Offshore Energy Today

Japanese oil and gas firm Inpex has signed memorandums of understanding (MOUs) with PT PLN Persero (PLN) and PT Pupuk Indonesia for the long-term domestic LNG and pipeline natural gas supply from the Abadi LNG project offshore Indonesia.

Inpex said on Thursday that the MOUs were signed by its subsidiary Inpex Masela, and on behalf of its joint venture partner Shell Upstream Overseas Ltd.

The agreements were signed in the presence of Indonesia’s Minister for Energy and Mineral Resources Arifin Tasrif in Jakarta on February 19, 2020.

The company added that discussions would now begin regarding sales and purchase agreements for the long-term LNG and natural gas supply from the project.

These will include LNG for natural gas-fired power plants operated by PLN and natural gas – 150 million scf per day – to a coproduction plant, which will be constructed by Pupuk Indonesia.

Inpex added that the long-term supply of LNG and natural gas from Abadi was consistent with the Indonesian Government’s focus on optimizing domestic natural resource utilization and would provide significant contributions to Indonesia where gas demand continues to grow, including multiplier effects that will benefit the country, particularly in the eastern region.

Abadi is the first large-scale integrated LNG development project operated by Inpex in Indonesia and follows on from the Ichthys LNG project in Australia.

Inpex and Shell will develop Abadi via an offshore production facility and a 9.5 million tonnes per annum (mmpta) onshore LNG plant, at an estimated cost of $20 billion.

As previously reported, Inpex received approval from Indonesian authorities for the revised Plan of Development (POD) for the Abadi LNG project back in July 2019.

In October of the same year, Inpex signed a seven-year additional time allocation for the Masela PSC and a 20-year extension for the Abadi LNG project with Indonesia’s upstream oil and gas regulator SKK Migas.