LNG

Japanese utility Inpex has signed preliminary deals with BP and Shell Eastern Trading, as well as the Indonesian companies PLN Energi and Perusahaan Gas Negara, to offtake LNG from the 9.5 mtpa Abadi liquefaction project. The accords take the project closer to a final investment decision (FID) in 2027.

Conrad Asia Energy, an Australian-listed natural gas exploration and production company, has entered into a binding gas sales agreement for the domestic portion of the Mako gas field in Indonesia and with an option to sell the balance of the pipeline gas to LNG importer Singapore.

Conrad has signed the agreement to sell domestic gas to Perusahaan Gas Negara (PNG), the gas utility subsidiary of Pertamina, the national oil and gas company of Indonesia.

The ASX-listed company said the deal with PGN for gas from the Mako gas field, in which Conrad has a 76.5 percent participating interest, is an important step in the commercialisation of the largest undeveloped gas field in the West Natuna Sea.

PGN is Indonesia’s largest gas company and a separate GSA is being negotiated with Singaporean parties for the remainder of the Mako gas resource to be exported by pipeline to the Asian city state.

Singapore pipeline

The West Natuna Sea gas gathering system is already connected to Singapore.

However, PGN is proceeding with constructing a tie-in pipeline to the island of Batam across the Malacca Strait that will connect the Natuna Sea volumes to the Indonesian market.

It was noted by Conrad that completion of both GSAs would be significant landmarks on the path to a final investment decision for the Mako project targeted for the fourth quarter of 2024.

Conrad said it was moving towards finalising a GSA for the Mako export gas for Singapore over the coming few weeks.

The gas will supply Singapore through an existing pipeline in competition to the LNG cargoes delivered to the Jurong Island LNG terminal.

UK company Empyrean Plc is also a shareholder in the project. The Mako field contains contingent resources of 376 billion cubic feet of which 21 Bcf are net attributable to Empyrean.

Long-term supplier

The West Natuna Sea gas fields have been supplying Singapore with natural gas for more than two decades and the Mako project is expected to continue this supply for at least another 10 years from 2026.

In addition to the significance for the Mako development, Conrad said that the accord builds an important platform for Conrad with Indonesia’s national companies.

Conrad said it would continue to grow its business relationship with PGN through its other discovered gas resources offshore Aceh and related to which the two parties signed an accord in February 2024.

“Our focus has been finalising the underwriting gas sales agreements between the Mako Joint Venture, the Indonesian Government and Regulator and Singapore,” said Conrad Chief Executive Miltos Xynogalas.

“These agreements are the essential documents that demonstrate financial viability of the project, which in turn underwrite value and financial sustainability,” the CEO added.

Empyrean Energy, the UK-listed oil and gas company with interests in Indonesia, China and the United States, reported that an accord containing key terms has been signed for the Indonesian Mako gas field to supply Singapore by pipeline and domestic gas to the Indonesians.

Höegh LNG Partners, the owner and operator of five floating storage and regasification units, has completed the refinancing of two FSRUs contracted as floating import terminals in Indonesia and Turkey.

Indonesia’s energy regulator said Royal Dutch Shell was considering selling its 35 percent stake in the offshore Abadi natural gas field in the Masela block that will underpin an onshore LNG export joint venture proposed for Yamdena Island with Inpex Corp of Japan.

National oil companies in Asian states are looking for ways to alleviate the severe financial crises brought on by the price crash and the Covid-19 pandemic and the Indonesian energy company Pertamina is planning an overhaul and spin-offs for more subsidiaries.

The Japanese oil, gas and LNG company Inpex, operator of the Ichthys LNG plant in northern Australia and developer of the Abadi LNG project in Indonesia, expects consolidated six-month operating income to June 2020 to drop by over 48 percent and plans to take out government loans.

Inpex Corp., the developer of the Abadi onshore liquefaction and export plant in Indonesia, has awarded the Netherlands-based geo-data company Fugro a large marine survey contract to conduct geophysical and geotechnical surveys for the project.

Inpex is building the plant on Yamdena Island in a joint venture with Royal Dutch Shell using feed-gas from the Abadi gas field in the Masela Block of the Arafura Sea.

The liquefaction and export plant is expected to be operational by around 2027.

Inpex has already completed preliminary front-end engineering and design (FEED) for a facility with an annual initial capacity of 10.5 million tonnes.

Dutch firm Fugro will surveys and associated studies needed to support the FEED process for offshore production facilities and the pipeline to the onshore liquefaction plant.

Fugro said the geo-data would be acquired using Fugro’s deepwater autonomous underwater vehicle (AUV) “Echo Surveyor” and their robotic seafloor drill, “Seafloor Drill 2”, deployed from Indonesian support vessel.

“We are pleased to once again support Inpex, a company that understands the value provided by our geo-data expertise,” said Jerry Paisley, Fugro’s Business Line Director for the Asia Pacific Region.

“This is particularly valid for the development of the Abadi LNG project, where overcoming engineering challenges including slope stability, regional seismicity, subsea faulting and carbonate sediments will require a collaborative and informed approach at each stage of the Geo-data acquisition, analysis and advice,” added Paisley.

Indonesia’s state oil and gas regulator, the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), said it had sent a formal recommendation letter to the Maluku provincial administration formally asking to have the liquefaction plant on Yamdena Island.

The Indonesians had earlier proposed that a 370-mile pipeline should be built to connect the Abadi gas field resources to a liquefaction plant on Indonesia’s Aru Island, while Inpex had preferred a location in the southeast Asian nation's Tanimbar Islands.

Analysts said that Inpex seemed to have had its way as Yamdena Island is the largest of the Tanimbar Islands chain.

The original Inpex plan for the Abadi project with partner Shell was to produce LNG from a floating production hull, similar to the Prelude FLNG project offshore northwest Australia that shipped its first LNG cargo in June 2019.

The Indonesians have also approved a 20-year extension to the Production Sharing Contract (PSC) for the Masela Block, extending the term of the PSC until 2055.

Inpex and Shell will be finalizing a marketing plan in 2020 and will also be considering supply accord for the Indonesian state-run domestic natural and electricity companies, Perusahaan Gas Negara and Perusahaan Listrik Negara.

Inpex Corp. of Japan and Royal Dutch Shell now have a firm decision from the Indonesian government on the location for their onshore liquefied natural gas plant using feed-gas from the Abadi gas field in the Masela Block in the Arafura Sea offshore Indonesia.