President of Indonesia Joko “Jokowi” Widodo has reportedly decided against the use of FLNG unit for the development of Abadi field in the Masela block, offshore Indonesia.
According to Detik Finance website, the president has decided the field will be developed through an onshore plant. The news website has cited an Inpex spokesperson who said that Inpex is yet to receive the confirmation from the government. Inpex is the operator of the field with 65 percent stake. Shell owns the remaining 35 percent.
To remind, Inpex in September 2015 submitted a revised plan for the development of the Abadi gas field.
The original development plan, approved in 2010, was 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.
However, Inpex said that as a result of a greater volume of natural gas reserves being confirmed at the Abadi gas field, the revised development plan envisions the adoption of a Floating LNG (FLNG) plant with an annual LNG processing capacity of 7.5 million tons.
Last week, following the absence of a decision on the approval for the revised field development plan both Inpex and Shell decided to cut workforce at the project, SKK Migas Indonesia’s special task force for upstream oil and gas business activities, said.
Offshore Energy Today has reached to Inpex and Shell both, seeking confirmation and more info on the reports of Abadi FLNG cancellation.
A Shell spokesperson said: “We are unable to comment now as we are waiting to receive a formal letter from the Government of Indonesia. We look forward to better understanding and discussing the implications of the decision with the relevant Government agencies.”
Inpex has yet to respond. Offshore Energy Today will update the article accordingly.
Worth noting, this is not the first “bad news” for FLNG today. Australian energy company Woodside has decided not to move forward with its Browse development in the Australia saying that the current market environment doesn’t warrant the development. To remind, Woodside had envisioned not one, but three FLNG units for the Browse project.
Offshore Energy Today Staff