Inpex and the Indonesian government sign a development agreement for Abadi LNG

KARUIZAWA, Japan (Reuters) – Inpex Corp., Japan's largest oil and gas explorer, and the Indonesian government on Sunday signed a basic agreement on the development of the Indonesian liquefied natural gas project Abadi, for $ 15 billion.

Inpex chairman, Takayuki Ueda, said the Japanese company, which owns 65% of the project, intended to submit to the Indonesian government a development plan in the coming weeks and make a decision final investment in 2-3 years.

The signing ceremony took place on the sidelines of a meeting of G20 Energy and Environment Ministers in Karuizawa, north-west of Tokyo, which will be attended by the Minister. Indonesian Energy and Mineral Resources, Ignasius Jonan.

The remaining stake in the Abadi project, located in the Masela Block, is owned by Royal Dutch Shell, the world's largest buyer and seller of LNG.

Shell, however, plans to sell its stake in the Abadi project, sources in the banking and banking sector said in May, following a divestiture program that raised more than $ 30 billion. dollars.

When asked if Shell was considering selling its stake in the project, Ueda said his company had not heard about it.

"We signed today an agreement with the Indonesian government on behalf of the project partners, after obtaining approval from Shell," he told reporters.

Their sharing contract for the project, which is expected to be operational between 2025 and 2030, has been extended from 27 years to 2055, Ueda added.

The agreement includes the estimated costs, the project period and the tax conditions, said Ueda, without giving more details.

The construction of this project was to begin in 2018, but in 2016, it was delayed by at least 2020, after the Indonesian authorities ordered to move from an offshore facility to an onshore facility.

In March 2018, Inpex began the preliminary technical design of the project (Pre-FEED) with an annual LNG treatment capacity of 9.5 million tonnes.

For Inpex, it will be its second major LNG project as operator after the $ 40 billion Ichthys LNG project in Australia. Ichthys, Japan's largest overseas investment and the country's first major project as a major operator, began shipping LNG last October, after several delays and cost overruns.