Page 4 - GLNG Week 39 2022

GLNG COMMENTARY GLNG

Indonesia’s Abadi LNG

faces further delay

INDONESIA’S Abadi LNG project will see fur- and CCS for the Abadi LNG project. The MoU
COMMENTARY ther delays in its implementation as operator was signed in Japan during the Second Asia
INPEX of Japan conducts new studies designed Green Growth Partnership Ministerial Meeting
to determine the feasibility of hydrogen and organised by Japan’s Ministry of Economy, Trade
ammonia production as well as carbon capture and Industry (METI).
and storage (CCS). The project, also known as INPEX said in a statement released on Sep-
Masela LNG, was previously delayed when the tember 27 that its talks to supply LNG to gas-
original plan to develop it as a floating LNG fired power plants owned and operated by PLN
(FLNG) project was changed to an onshore pro- have been proceeding. The Japanese firm said
ject according to a plan that was approved by the that “to make the project clean and competitive
Indonesian government in 2019, with an opera- in service of the energy transition” it was con-
tional target of 2027. ducting a comprehensive study on the introduc-
Also, as with most other projects worldwide, tion of CCS and cost reduction. It added that to
the coronavirus (COVID-19) pandemic caused make further use of CCS facilities, it is “consider-
a significant delay by the interruption of survey ing the production of blue hydrogen and ammo-
work. nia using natural gas produced from the project.”
With the decision to conduct new studies “The scope of the MoU…includes conduct-
designed to qualify the project in accordance ing joint studies on supplying blue hydrogen
with energy transition objectives, it is unclear and ammonia using natural gas produced from
as to when INPEX will make a final investment the project as co-firing fuel for thermal power
decision (FID), but one is tentatively anticipated plants [TPPs] in Indonesia that PLN owns and
later this decade. operates, as well as on the capture and transport
Furthermore, Shell, which is INPEX’s part- of CO2 emitted from thermal power plants in
ner with a 35% stake in the $20bn project, has Indonesia and the storage of this CO2 in the
announced that it wants to divest from its share. Abadi Gas Field. This initiative is expected to
In recent weeks, the Indonesian government contribute to realising PLN’s achievement of
has said it is looking to form a consortium com- net-zero emissions by 2060,” the statement said.
prised of Pertamina, the Indonesian Investment Meanwhile, Indonesia is facing a situation
Authority and other companies that would take where growing energy demand is bumping up
over Shell’s stake. INPEX holds 65% of Abadi against its inability to develop its gas resources
LNG. along with a lack of gas infrastructure. It is
The facility will likely be located in the Tanim- looking to double current gas production from
bar Islands in Maluku Province. Discovered in around 6.5bn cubic feet (184mn cubic metres)
2000, the Abadi gas field in located some 150 km per day to 12 bcf (340 mcm) per day by 2030,
from the islands and after nine appraisal wells but whether that will be possible with the delay
is estimated to hold 12 trillion cubic feet (340bn expected for Abadi LNG and also for the Chev-
cubic metres) of proven natural gas reserves at ron-led Indonesia Deepwater Development
depths of 3,700-3,900m. The project involves the (IDD) project suggests that target might not be
development of the Abadi gas field in the Masela reached.
Block in the Arafura Sea and construction of an According to Statista, Indonesia produced
onshore LNG terminal with a capacity to pro- 59.3 bcm of natural gas in 2021 and held gas
cess 9.5mn tonnes per year (tpy). The plan also reserves of 1.3 tcm in 2020. Much of Indonesia’s
allows for the delivery of gas by pipeline to local gas production is exported by foreign companies
customers and the production of 36,000 barrels that have developed and are operating the gas
per day (bpd) of condensate. fields. Furthermore, while it is clear that Indo-
Indonesian authorities are expecting to nesia needs to move away from highly polluting
receive a new plan from INPEX including the coal, its power generation system remains very
costs for CCS and hydrogen/ammonia produc- dependent on the fossil fuel, and making a switch
tion in the coming months, but that will depend to renewables is not seen as going smoothly.
on how smoothly the studies go. According to media reports, it appears likely
Last week, INPEX, through its subsidiary the Italy’s Eni will take over Chevron’s 62%
INPEX Masela, extended a memorandum of holding in the IDD project, which includes
understanding (MoU) with Indonesia’s power production-sharing contracts (PSCs) for the
plant operator PT PLN (Persero) covering long- Ganal and Rapak blocks and gas fields Bangka
term LNG supply and it expanded the MoU to and Gehem-Gendalo. Chevron announced two
incorporate joint studies in hydrogen/ammonia years ago that it was seeking to divest from IDD.

P4 www. NEWSBASE .com Week 39 30•September•2022