Japan’s Inpex signs deal with Indonesia to develop Abadi LNG project
KARUIZAWA, JAPAN: Japan's biggest oil and gas explorer, Inpex, and the Indonesian government signed a basic agreement on the development of Indonesia's Abadi liquefied natural gas (LNG) project yesterday, moving forward the US$15 billion (S$20.5 billion) project.
Inpex president Takayuki Ueda said the Japanese company, which owns a 65 per cent stake in the project, plans to submit a development blueprint for the project within several weeks to the Indonesian government and aim to make a final investment decision within two to three years.
The signing ceremony took place on the sidelines of a meeting of G-20 energy and environment ministers in Karuizawa, which Indonesian Energy and Mineral Resources Minister Ignasius Jonan is attending.
The remaining stake in the Abadi project, situated in the Masela block, is owned by Royal Dutch Shell, the world's largest buyer and seller of LNG.
But Shell is moving to sell its stake in the Abadi project, industry and banking sources said in May, following on from an asset disposal programme that has raised more than US$30 billion.
Asked whether Shell plans to sell its stake in the project, Mr Ueda said his company has not heard about that from Shell.
"We have signed a heads of agreement with the Indonesian government today on behalf of the project partners, after gaining endorsement from Shell," he told reporters.
Their sharing contract for the project, aimed to start operations between 2025 and 2030, was extended to 2055, Mr Ueda added.
The agreement includes estimated costs, targeted project period and fiscal conditions, Mr Ueda said, without giving further details.
Construction for this project was due to start last year but was delayed in 2016 until at least 2020 after the Indonesian authorities instructed a switch from an offshore to an onshore facility. - REUTERS