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Pertamina Still Discussing Plan to Take Over Shell's Abadi LNG Stake

January 17, 2023

©Inpex (File image)
©Inpex (File image)

Indonesian state energy firm Pertamina is still discussing its plans to participate in the Abadi liquefied natural gas (LNG) project with the country's upstream oil and gas regulator, officials said on Tuesday.

 Indonesia has been seeking an investor for years to take over a 35% stake in the project also known as the Masela gas project, after the company signaled its intention to withdraw. Pertamina has expressed an interest to join. 

S&P Global Platts reported on Monday that Pertamina will take over Shell's stake in the project, citing the energy minister. 

However, the chairman of upstream oil and gas regulator SKK Migas, Dwi Soetjipto, told Reuters on Tuesday that the plans were still being worked out for Pertamina to take over Shell's position. "Still under discussion. We shall wait," he said, without providing further details about the talks. That was backed by a comment from Pertamina's upstream unit spokesman Arya Dwi Paramita, who said, "Still being discussed."

Japanese energy company Inpex, which controls 65% of the project, said the issue with the partners and carbon capture and storage details needed to be sorted out before they can finalize a revised development plan for the project. 

The Abadi project is designed to produce 9.5 million tonnes of LNG per year and is expected to start operations in 2027, according to its development plan approved in 2019. But the project may be delayed by two years, authorities have said. 

The project had been expected to cost around $20 billion and has faced years of delays after various changes in planning, including to accommodate the government's request to move the project onshore. 

SKK Migas previously said Inpex would submit a revised plan of development to include a carbon capture and utilization and storage (CCUS) facility in the project, which is estimated to cost another $1.4 billion, and recalculate the project's value because of rising gas prices. 

(Reuters - Reporting by Fransiska Nangoy and Bernadette Christina Munthe; Editing by Christian Schmollinger)




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