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PT Perusahaan Gas Negara (PGN), a unit of Indonesia’s Pertamina, said in a statement on Thursday that it had signed a heads of agreement with Inpex Masela, facilitating the sale of LNG from the Abadi field in the Masela Block.
“PGN remains dedicated to aligning with government directives regarding the commercialization and regulatory compliance related to the Masela Block LNG,” it said.
PGN said the agreement with Inpex Masela solidifies the utilization of gas from the “strategically significant” block.
Moreover, the firm said it would leverage LNG produced from the block as a complementary source to fulfill domestic gas requirements.
“Gas supply from one of Indonesia’s largest LNG projects may further catalyze infrastructure growth designed to deliver natural gas directly to consumers,” it said.
“Robust partnerships between government and business entities are anticipated to optimize the Masela Block’s value, strengthening national energy security,” PGN added.
In addition to this agreement, several reports, citing a statement by Inpex Masela, said that the firm also signed heads of agreements with Indonesia’s state power company PLN and fertilizer producer Pupuk Indonesia.
LNG Prime invited Inpex to comment on the matter.
Besides these memorandums, Badak LNG, the operator of Pertamina’s Bontang LNG export terminal in East Kalimantan, also signed a cooperation deal with Inpex Masela.
Badak LNG confirmed the signing of the deal in a social media post.
“This collaboration is expected to increase regional capacity in the management of LNG projects and bring sustainable benefits to both parties,” it said.
FEED
Last month, a spokesman for Inpex confirmed that the company still expects to launch the front-end engineering design (FEED) for the planned Abadi LNG project in mid-2025.
Inpex held a press conference in Jakarta on April 9 about the Abadi LNG FEED process.
“The purpose of the OLNG FEED “initiation,” which was raised this morning, is to increase the certainty that FEED work will be completed on schedule by carrying out a portion of the FEED work on the onshore facility in advance of the actual FEED work, which is scheduled to start in the middle of 2025, as previously announced,” the spokesman said.
He said in February that Inpex expects to begin FEED in the middle of this year, “provided government approvals and contractor bid preparations proceed as expected.”
FEED will be divided into four packages, including the onshore LNG plant (OLNG), the FPSO, the subsea umbilicals, risers, and flowlines (SURF), the gas export pipeline (GEP), and the CCS pipeline.
Bidding preparations for these four packages are being implemented simultaneously.
“We have also said that FEED typically takes two years to accomplish, so that would put FID in around 2027. We will aim to start production at the beginning of the 2030s,” the spokesman said.
Three partners
The Inpex-operated project has seen many changes over the years and initially, the development of the Masela offshore block involved a floating LNG plant, while it now includes a 9.5 mtpa onshore LNG plant with an estimated cost of about $20 billion.
In December 2023, Inpex received written approval for the revised plan of development for the Abadi LNG project, which includes a CCS component.
Prior to that, Shell completed the sale in October of its 35 percent stake in Indonesia’s Masela PSC, which includes the planned Abadi LNG project, to Pertamina Hulu Energi and Petronas Masela.
Pertamina owns a 20 percent stake and Malaysia’s Petronas has a 15 percent stake in the PSC.
Inpex holds 65 percent operating interest in Masela PSC and is the operator of the Abadi LNG project.