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Japan’s Inpex broke ground on Thursday for its Abadi liquefied natural gas (LNG) project in Indonesia. Inpex is yet to take a final investment decision on the project.
According to a statement by Indonesia’s Cabinet Secretariat, President Prabowo Subianto officially kicked off the groundbreaking ceremony for the Abadi Masela LNG project on Thursday, July 16.
The event was held via hybrid video conference from the Merdeka Palace in Jakarta and the project site in the Tanimbar Islands Regency, in Maluku province.
“With an investment value of approximately $20.9 billion, the Abadi Masela LNG project will have a production capacity of 9.5 million tons of LNG per year, with 60 percent of production prioritized to meet domestic needs,” the statement said.
According to the statement, the project is expected to start production in 2029-2030.
The statement did not provide further details.
Inpex previously said that it expects to take FID in 2027, with production starting at the beginning of the 2030s.
LNG Prime contacted Inpex to comment on the groundbreaking ceremony, as the project has not yet reached FID.
“Actual construction work will commence after FID,” a spokesman for Inpex said, without providing additional information.
Preliminary LNG deals
In February this year, Inpex received environmental approval for the Abadi LNG project from the Indonesian government.
With this approval in place, Inpex said it plans to progressively commence preparatory work at the project site, while securing the understanding and cooperation of the Indonesian government, relevant local authorities, and surrounding communities.
Following this approval, Inpex reached preliminary agreements in May with energy giants BP and Shell, PT Perusahaan Gas Negara (PGN), a unit of Indonesia’s Pertamina, and Indonesia’s state power company PLN relating to LNG offtake from the planned Abadi LNG project.
The Japanese firm also reached an agreement in principle with fertilizer producer Pupuk Indonesia regarding pipeline natural gas supply from the Abadi LNG project.
Inpex said at the time it would work with the prospective customers toward finalizing sale and purchase agreements (SPAs) that collectively are expected to cover a “significant portion” of the project’s anticipated LNG production volume.
In addition, Inpex expects to complete the front-end engineering design (FEED) work for the Abadi LNG project by the end of this year, Takayuki Ueda, president and CEO of Inpex, said during the company’s financial results presentation in February.
Based on the detailed cost estimates, calculated on the basis of FEED deliverables that are expected to be obtained at the end of 2026, Inpex will review and verify the validity of the EPC bid proposal, he said.
Inpex Masela, a unit of Inpex, has a 65 percent operating stake in the Abadi project, while Pertamina has 20 percent, and Malaysia’s Petronas owns 15 percent.
In 2023, Shell completed the sale in October of its 35 percent stake in Masela PSC, which includes the planned Abadi LNG project, to Pertamina Hulu Energi and Petronas Masela.
