ByTsvetana Paraskova– Feb 26, 2025, 6:00 AM CST
The planned Abadi LNG project in Indonesia has received interest from potential buyers to purchase gas from the facility in volumes exceeding the facility’s design capacity, according to the operator.
Japan’s oil and gas producer Inpex owns 65% of the Abadi gas project and plans a final investment decision (FID) for the facility by 2027.
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The $20-billion Abadi LNG project has seen years of delays as it has had to change design concepts and then reorganize after supermajor Shell withdrew from the project nearly two years ago.
In 2023, Shell sold its 35% participating interest in Indonesia’s Masela Production Sharing Contract, which includes the Abadi gas project, to Indonesia’s PT Pertamina and Malaysia’s Petronas.
Inpex holds a 65% operating interest in Masela PSC and is the operator of the Abadi gas project, which is located in the Masela block, 150 kilometers (93 miles )offshore Saumlaki in Maluku province, Indonesia.
Inpex is confident it can proceed with the project without Shell, the Japanese company’s chief executive officer Takayuki Ueda told Reuters in an interview published on Wednesday.
Moreover, Inpex has so far received inquiries from potential customers of the project for volumes exceeding the planned capacity of up to 9.5 million metric tons of LNG per year, the executive said.
“Non-binding inquiries from (potential buyers in) Indonesia, China, Taiwan, and other Asian countries have already exceeded Abadi’s production volume,” Ueda told Reuters.
The Ichthys LNG project in Australia, which Inpex also operates and which began production in 2018, had Japanese firms accounting for 90% of its long-term buyers. But this high share of Japanese buyers is not expected to be the case of the Abadi project in Indonesia, due to strong demand from other markets, too, Ueda said.
Global LNG demand is set to surge by 60% through 2040, pushed up by Asia’s economic growth, the world’s biggest LNG trader, Shell, said in its annual LNG report earlier this week.
By Tsvetana Paraskova for Oilprice.com
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