Following reports that Indonesian government has decided against the proposed floating LNG solution for the development of the Inpex-operated Abadi offshore gas field, the Japanese company has now issued a confirmation.
In a statement on Monday, Inpex said it had received a notification from Indonesian government authorities instructing to re-propose a plan of development based on onshore LNG for the Abadi LNG Project.
Inpex said the notification was in response to the revised plan of development (Revised POD) submitted to Indonesian government authorities on September 3, 2015.
“The company will carefully examine the contents of the notification, and intends to work closely with the Indonesian government authorities aiming for the early start-up of development. Going forward, INPEX will openly disclose in a timely manner any developments on this subject,” Inpex said.
Inpex is the operator of the Abadi field with 65 percent stake. Shell owns the remaining 35 percent.
The Abadi gas field, discovered in 2000, is located in the Masela block, in the Arafura Sea, offshore Indonesia. In September 2015, Inpex submitted a revised plan for the development of the Abadi gas field, envisioning the adoption of a Floating LNG (FLNG) plant with an annual LNG processing capacity of 7.5 million tons. The company said the reason was a greater volume of natural gas reserves confirmed at the Abadi gas field.
The initial plan, filed in 2010, had been based on developing the Abadi gas field in stages and targeted the deployment of an FLNG plant with an annual LNG processing capacity of 2.5 million tons as the first stage of development.
It seems now that Inpex and Shell will have to go to the square one, and develop a plan without floating solution inside.