Inpex Masela has received approval from Indonesian authorities for the revised plan of development (PoD) for the Abadi LNG project.
A revised plan for the project was submitted on 20 June.
Indonesian authorities have also approved an application for seven-year additional time allocation and a 20-year extension to the production sharing contract (PSC) for the Masela Block.
Consequently, the term of the PSC has been extended until 2055.
The Masela Block is located 150km offshore Saumlaki in Maluku Province and the contract area covers around 2,503km².
The project has a capacity of 10.5 million tonnes of natural gas per annum and approximately 35,000 barrels of condensate a day.
Inpex president and CEO Takayuki Ueda said: “The approval of the revised PoD by the authorities is a significant milestone for the Abadi LNG Project.
“While the project’s development concept has been changed from a floating LNG scheme to an onshore LNG scheme, I am confident that the economics of the project based on the revised PoD are now sufficiently strong for INPEX and Shell given the PSC term until 2055 and sufficient financial conditions have been secured following a series of constructive discussions with the authorities.
“INPEX aims to make this project competitive and will continue to work toward the production startup scheduled in the latter half of the 2020s.”
The company said that it would work with Shell to begin the preparations for front-end engineering design (FEED). A final investment decision will be taken based on subsequent evaluations, including FEED work.
The Japanese firm acquired the Masela Block in November 1998 through an open bid conducted by the Indonesian Government.
The Abadi LNG project is the first integrated LNG development project operated by Inpex in Indonesia. The company said that the Abadi gasfield features excellent reservoir productivity and also has one of the world’s largest resources.
Through Inpex Masela, the company has a 65% stake in the project, while Shell Upstream Overseas holds the remaining 35% stake.
Shell executive vice-president of venture development Clare Harris said: “As the joint venture moves to the next phase of the Abadi project, we look forward to continuing our close collaboration with INPEX in delivering a globally competitive onshore LNG development that will benefit the country for decades to come.”