战略与国际研究中心-Gas-Line-Q3-2019_4页_239kb

Abadi LNG Project Revised Plan of Development Summary

Core Content

INPEX CORPORATION, through its subsidiary INPEX Masela, Ltd., has submitted a revised Plan of Development (POD) for the Abadi LNG Project in the Masela Block, Indonesia. The revised POD is based on an onshore LNG development scheme with an annual production capacity of 9.5 million tons of LNG. This submission follows a series of dialogues with Indonesian government authorities and is aligned with the Heads of Agreement (HOA) signed on June 16, 2019.

Key Information

• Project Overview: The Abadi LNG Project involves the development of the Abadi gas field in the Arafura Sea, located 150 kilometers offshore Saumlaki in Maluku Province.
• Production Capacity: The project has a total output of natural gas (LNG equivalent) of 10.5 million tons per year, including approximately 9.5 million tons of LNG and local gas supply via pipeline, as well as up to 35,000 barrels of condensate per day.
• Participating Interests:
  • INPEX (INPEX Masela, Ltd.): 65% (Operator)
  • Shell (Shell Upstream Overseas Ltd.): 35%
• PSC Extension: The Production Sharing Contract (PSC) term will be extended to 2055, with an additional 7 years allocated due to the time spent studying the previously proposed development scheme. This extension is essential for achieving competitive project economics.
• Project Significance: The Abadi LNG Project is the first large-scale integrated LNG development project operated by INPEX in Indonesia and follows the successful Ichthys LNG Project in Australia. It is recognized as a national strategic project by the Indonesian government and a priority infrastructure project.

Main Points

• Milestone Achieved: The submission of the revised POD represents a significant milestone in the project's development.
• Collaboration: INPEX and Shell are working in partnership to secure the project's approval and progress toward Final Investment Decision (FID) and production commencement.
• Financial Impact: The submission is expected to have minimal impact on INPEX's consolidated financial results for the year ending December 2019.
• Future Plans: INPEX intends to commence Front-End Engineering Design (FEED) work following the authorities' approval of the revised POD and aims for production startup in the latter half of the 2020s.

Strategic Importance

• The project is expected to provide significant contributions to Indonesia, particularly in the eastern region, through job creation and economic development.
• It is anticipated to bring long-term stable LNG production operations due to the excellent reservoir productivity of the Abadi gas field.
• The extended PSC term is crucial for ensuring the project's financial viability and long-term success.

Background

• In April 2016, the Indonesian government instructed INPEX to resubmit a POD based on an onshore LNG development scheme.
• The revised POD incorporates the results of Pre-Front End Engineering Design (Pre-FEED) work conducted between March and October 2018.
• The HOA signed on June 16, 2019, outlines key terms including cost estimation, PSC period, and financial conditions, which are reflected in the revised POD.

Conclusion

The revised Plan of Development for the Abadi LNG Project marks a pivotal step in the project's journey toward realization. With the support of the Indonesian government and collaboration between INPEX and Shell, the project is well-positioned to become a major contributor to Indonesia's energy sector and economy.