The Indonesian government hopes discussions with state energy company Pertamina over its acquisition of Shell’s stake in the Abadi liquefied natural gas (LNG) project will be finalised in the first half of this year, a senior energy official said on Friday.
Indonesia has long sought an investor to take over Shell’s 35% stake in what is also known as the Masela gas project after the company announced its intention to withdraw. Japanese energy company Inpex Corp leads the project with a 65% stake.
“Pertamina will be one of the consortium members to execute the project … I hope (discussions will finalise) soon – in the next couple of weeks, next couple of months,” Indonesian energy minister Arifin Tasrif told reporters.
Inpex has yet to submit a revised development plan for the Abadi project to include a carbon capture and utilisation and storage facility, which is expected to add more than $1 billion to the total cost of about $20 billion.
Asked when Inpex is expected to submit the revised plan and when production could start, Tasrif said “they have to accelerate and improve the speed”.
The Abadi project is designed to produce 9.5 million tonnes of LNG per year and is expected to begin operations in 2027, according to the development plan approved in 2019, but authorities have since said it could be delayed by two years.
Reuters