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Indonesia, Inpex agree on Abadi LNG project
PROJECTS & COMPANIES
THE Indonesian government has signed a heads of agreement (HoA) with Japanese developer Inpex on the development of the Abadi lique ed natural gas (LNG) project on the Arafura Sea.
e agreement was signed on June 16 on the sidelines of the G20 meeting of energy and envi- ronment ministers in Karuizawa, Japan. Inpex president Takayuki Ueda said a er the signing that his company intended to submit a devel- opment plan for the project within the coming weeks and was looking to reach a nal invest- ment decision (FID) within three years.
e executive added that the HoA covered estimated costs, the targeted project period as well as nancial conditions. e Abadi project is located in the o shore Masela block.
Indonesian Energy Minister Ignasius Jonan told S&P Global Platts on June 15 that the pro- ject would produce 9.5m tonnes per year (t/y) of LNG for the export market and 150m cubic feet per day (cf/d) (4.25m cm/d) of gas for domestic consumption.
Inpex owns a 65% stake in the project, which carries an estimated price tag of $15bn, while Royal Dutch Shell holds the remaining 35%. While reports emerged in May that Shell was preparing to sell its stake, Ueda said last week that the Anglo-Dutch
super-major had not discussed its plans with Inpex.
“We have signed a [HoA] with the Indone- sian government today on behalf of the project partners, a er gaining endorsement from Shell,” he told reporters.
Construction work on the project was sup- posed to have started in 2018, but was delayed after Jakarta directed the consortium to shift from a floating LNG (FLNG) design to an onshore liquefaction plant. The government insisted on an onshore development, a er the partners proposed raising the FLNG’s capacity from 2.5m t/y to 7.5m t/y, claiming that it would provide a bigger boost to the local economy. is prompted Inpex to raise the project’s proposed capacity to the current 9.5m t/y.
Indonesian media reported in March that the government had been pushing the partners to raise domestic supply to 475m cf/d (13.45m cm/d), but Jakarta has clearly backtracked from this position.
Inpex and Shell’s contract for Abadi was extended by 27 years to 2055 to account for delays and the higher investment required to bring an onshore project to fruition. e ter- minal is anticipated to come onstream between 2025 and 2030.™
EUROPE
Novatek gets regulatory nod to build Arctic LNG-2
PROJECTS & COMPANIES
RUSSIA’S largest private gas producer Novatek has secured regulatory clearance to build the Arctic LNG-2 terminal on the Gydan Peninsula.
State design agency Glavgosexpertiza has reported approving Novatek’s construction pro- posal for the plant, which will be sited on the shore of the Ob Bay.
During the project’s initial phase, the Rus- sian government will oversee the development of navigation channels and support infrastruc- ture for the terminal. is work will be nanced by the federal budget, under a decree signed by President Vladimir Putin earlier this year. Novatek will then fund the construction of the terminal and other facilities.
Following the successful completion of the 16.5mn tonne per year Yamal LNG project in late 2017, Novatek has set out to expand annual LNG output in the Russian Arctic to 70mn tonnes by 2030.
Arctic LNG-2 will consist of three 6.6mn tonnes per year (tpy) liquefaction trains, the rst of which is due on stream in 2023. It will process
gas from the Utrenneye eld, assessed to con- tain almost 2tn cubic metres of gas and 105mn tonnes of liquid hydrocarbons.
Novatek nalised the sale of a 20% stake in the venture to Chinese oil and gas companies CNPC and CNOOC earlier this month, having already brought on board France’s Total as an investor with a 10% interest. e Russian com- pany aims to reach a nal investment decision (FID) in the third quarter of this year.
In addition to Arctic LNG-2, Novatek is building a 0.9mn tpy fourth train at Yamal LNG, designed to showcase its proprietary Arctic Cas- cade liquefaction technology. It also intends to employ Arctic Cascade at the 4.8mn tpy Obsk LNG plant, slated for commissioning in 2022.
While Yamal LNG and Arctic LNG-2 rely heavily on foreign technology and equipment, Novatek is looking to use as much domestic con- tent as possible at Obsk LNG. CEO Leonid Mik- helson told reporters on June 7 that the company was unlikely to invite partners to take part in the project, unlike at its other LNG ventures.™
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