Japanese energy company INPEX Corporation has received written approval for the revised development plan for its Abadi LNG project in Indonesia.
INPEX received the approval on behalf of the joint venture composed of INPEX Masela, PHE Masela, and Petronas Masela.
The company submitted a revised Plan of Development (POD) to Indonesian government authorities on April 4, 2023, incorporating a carbon capture and storage (CCS) component to the existing development plan.
The authorities have now officially granted their approval for the revised POD, INPEX said in a statement on December 5, 2023.
According to the developer, the project is the first in which CCS-related costs are eligible for recovery based on the production sharing contract (PSC) scheme that governs crude oil and natural gas upstream operations in Indonesia.
“The approval of the revised POD paves the way for INPEX and its partners to fully mobilize the project as a clean project in support of the energy transition,” INPEX stated.
As the next step, INPEX and partners plan to pursue the revision of the PSC to incorporate CCS into the contractual scope of work and resume project operations including on-site activities and prepare for FEED work. Thereafter, the joint venture will implement the project with the aim of reaching a final investment decision (FID) and production startup at an early stage after completing the necessary preparations including marketing and financing activities.
Annual production of the Abadi LNG project is expected to reach 9.5 million tons, equivalent to more than 10% of Japan’s annual LNG imports.
In addition, it is expected to contribute to the economic development of the eastern part of Indonesia in particular, and to achieving Indonesia’s goal of reaching net zero CO2 emissions by 2060.
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