Inpex, Pertamina sign MoU to pursue Abadi LNG project

Japan’s Inpex Corporation has signed a memorandum of understanding (MoU) with Pertamina to pursue the implementation of the Abadi LNG project in Indonesia, it said on July 25.

This comes after the sales and purchase agreement (SPA) between Shell and Pertamina, along with Petronas, concerning the transfer of Shell's participating interest in the Abadi LNG project to Pertamina Hulu and Petronas, pending certain joint venture procedures and Indonesian government approval.

Inpex is currently preparing the Abadi LNG project for development in the Masela block in the Arafura Sea, Indonesia, where it operates.

The MoU between Inpex and Pertamina aims to establish a strategic collaboration focusing on various aspects of the Abadi LNG project's value chain. This includes opportunities for collaboration on LNG and other product offtake and transportation, hydrogen and ammonia production, and meeting the needs of local stakeholders.

Upon the completion of the transfer of Shell's participating interest to the new partners, Inpex plans to resume project activities, including on-site preparations. Inpex had previously submitted a revised plan of development (POD) for the Abadi LNG Project, which incorporates a carbon capture and storage (CCS) component, to Indonesian government authorities.

Inpex said it plans to revise the production sharing contract (PSC) accordingly once the POD is approved. The company will proceed with preparations required to reach a final investment decision (FID), including front-end engineering and design (FEED) work, marketing, and financing activities while ensuring investability.

The Abadi LNG project is expected to produce 9.5mn tonnes/year of LNG, accounting for over 10% of Japan's annual LNG imports, Inpex said.