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INPEX signs HOA for Abadi LNG project development

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INPEX Corp. has announced that it has signed a heads of agreement (HOA) with Indonesian authorities on behalf of the contractors with the endorsement of Shell Upstream Overseas Ltd on the basic principles regarding a revised plan of development (POD) for the Abadi LNG project.

According to the statement, the project consists of developing the Abadi gas field, which is located in the Masela Block in the Arafura Sea in Indonesia. It is expected to produce approximately 9.5 million tpy of LNG.

INPEX, as the operator of the project, and on behalf of the project’s contractors (INPEX and Shell), claims that it has been holding talks with the authorities with the aim of submitting the revised POD.

The HOA outlines the terms that were agreed with the authorities following talks held after the completion of pre-FEED work on a revised POD to achieve an economically competitive project. The cost estimation in the revised POD of the project, which will include the construction of an onshore LNG plant, gas pipeline and offshore facilities, is contained in the agreed terms of the HOA.

According to the statement, the signing of the HOA acknowledges agreement between the parties of a revised POD that is sufficiently economically competitive. INPEX claims that it will now start the process of submitting the revised POD for approval, as well as amending and extending the Masela Block production sharing contract (PSC).

Takayuki Ueda, President and CEO of INPEX, said: “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.”

INPEX will utilise the knowledge and experience it has acquired through operating the Ichthys LNG project. The company will continue to work alongside Shell in order to make the necessary preparations to commence FEED work after receiving approval of the revised POD, and after reaching an agreement with the authorities on the PSC amendments and extension.

Clare Harris, Shell’s Executive Vice President, Venture Development, added: “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.”

Read the article online at: https://www.lngindustry.com/liquefaction/17062019/inpex-signs-hoa-for-abadi-lng-project-development/

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