Japan's Inpex starts engineering design for Indonesia's Abadi LNG project
Japanese oil and gas explorer Inpex Corp. on Wednesday started the front-end engineering design process for its Abadi liquefied natural gas (LNG) project in Indonesia, as the government put pressure on the company to accelerate development.
The Abadi LNG project had faced years of delays including from requests by the previous administration to move the LNG plant onshore from an earlier offshore plan, Shell's exit from the project and a change in the development plan to incorporate a carbon capture and storage (CCS) component.
The FEED launch marks major progress for the Abadi project while the company works to accelerate its development, chief executive Takayuki Ueda told reporters in Jakarta.
Inpex has previously said it plans to reach a final investment decision (FID) for the project in 2027 and aims for production to start in early 2030s.
Indonesian authorities however are asking Inpex to move the timeline ahead.
"FID must be reached next year," Djoko Siswanto, chairman of upstream oil and gas regulator SKK Migas, said on Wednesday. He also demanded Inpex begin Abadi production in 2029.
To start production in 2029 would be "very, very challenging" for Inpex, Ueda said in response to SKK Migas's request.
"But since we understand that demand in Indonesia is growing very fast ... So, we'll make our best effort to accelerate the project so that we can reach the target for the production the government requested before 2030," he said.
Indonesia's oil and gas production has declined in the past decade because of depleting reserves and delays at new projects.
The government is keen to reverse the trend as President Prabowo Subianto vows to make Indonesia energy independent.
The Abadi project is expected to produce at its peak 9.5 metric MMtpy of LNG, 150 MMft3d of pipe gas and 35,000 bpd of condensate, data from SKK Migas shows.
Inpex operates the Abadi project and controls a 65% stake in it. Indonesia's Pertamina and Malaysia's Petronas took over Shell's 35% holding in the project in 2023.
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