Following Indonesian government approval of its environmental and social impact assessment (AMDAL), Inpex has initiated key tenders and site preparation for the multi-billion dollar Abadi LNG project. This approval, covering all core project elements from drilling to onshore liquefaction, is a major development milestone.

Project Status and Timeline

The project, a joint venture between Inpex, Petronas, and Pertamina, is in the Front-End Engineering and Design (FEED) stage for its four main packages: a floating production, storage and offloading vessel (FPSO), subsea umbilicals, risers and flowlines (SURF), a gas export pipeline (GEP), and an onshore LNG plant. The FEED work itself is costing around $1 billion and will establish a precise capital expenditure estimate. A final investment decision (FID) is targeted for 2027, with project start-up aimed for the early 2030s.

Key Developments and Commercial Aspects

Inpex has launched a tender for the development drilling campaign, seeking a contractor to provide a dual-derrick mobile offshore drilling unit (MODU) capable of deepwater operations. The company has also received non-binding letters of intent from potential buyers exceeding the project's planned LNG output, citing strong interest due to its location in Asia. Negotiations on sales term sheets to support FID are ongoing. Financing plans involve using equity for the upstream portion and a trustee borrowing scheme for the downstream portion.

Project Scope and Significance

The Abadi project will develop multi-trillion cubic foot gas resources in the remote Masela block. At peak, it is designed to produce approximately 9.5 million tonnes per annum of LNG (equivalent to over 10% of Japan's annual imports), 150 million cubic feet per day of pipeline gas for the local market, and up to 35,000 barrels per day of condensate. Designated a national strategic project by Indonesia, Abadi is expected to enhance energy security in Indonesia, Japan, and Asia, contribute to eastern Indonesia's economic development, and support Indonesia's net-zero emissions goal by 2060 by providing a long-term, low-carbon energy supply.