Inpex group signs formal PSC extension for Abadi field development

Japanese company Inpex Corp. and its joint venture partner Royal Dutch Shell PLC have signed the Masela block production-sharing contract amendment, which includes a 7-year additional time allocation and a 20-year extension of the proposed Abadi LNG project. The project will be supplied with gas from Abadi field in the Indonesian portion of the Timor Sea.

The deal, which was signed with the Indonesian government, marks the execution of the formal agreement on the PSC terms made in a heads of agreement and announced in July as part of the government’s approval of the Abadi project revised plan of development.

The PSC term will now extend until 2055 and the project’s development plan has been changed from a floating LNG scheme to an onshore LNG scheme.

A project start-up date is envisaged for the latter half of the 2020s and the JV has begun preparations for the front-end engineering and design stage.

Abadi is Inpex’s first large-scale integrated LNG project in Indonesia. Abadi field, first discovered in December 2000, lies 150 km offshore Saumlaki in the Tanimbar Islands. Water depth over the field varies at 400-800 m.

Following numerous delays and changes of plan, Inpex completed a feasibility study in late 2018 for a 9.5 million tonne/year onshore plant at an undisclosed location. Additionally, there will be production of about 35,000 b/d of condensate. Total recoverable gas reserves for the field have been estimated at around 20 tcf.

Inpex is operator and holds 65% interest. Shell has the remainder.