Inpex, a Japanese company, has begun engineering design work for Indonesia's Abadi Liquefied Natural Gas project

Inpex Corp., a Japanese oil and natural gas exploration company, started Wednesday the front-end design process of its Abadi project for liquefied gas in Indonesia as the government pressed the company to speed up development.

Shell's withdrawal from the project, the request by the previous administration for the LNG plant to be moved onshore and the change of the development plan that included a component to capture and store carbon were all factors in years-long delays.

Takayuki ueda, the chief executive of the company in Jakarta, told reporters that the FEED launch represents a major step forward for the Abadi Project as the company strives to accelerate its progress.

Inpex previously stated that it planned to reach a Final Investment Decision (FID) on the project by 2027, and hopes to begin production in the early 2030s.

Indonesian authorities, however, are asking Inpex for a faster timeline.

Djoko Djoko Siswanto said, "FID must reach next year", chairman of the upstream oil regulator SKK Migas. Inpex must also begin Abadi production by 2029, he said.

Ueda, in response to SKK Migas, said that starting production in 2029 will be "very challenging" for Inpex.

"But we do understand that the demand in Indonesia is increasing very quickly... We will do our best to speed up the project in order to meet the target production requested by the government before 2030, he said.

Indonesia's oil production has decreased in the last decade due to depletion of reserves and delays with new projects.

As President Prabowo subianto pledges to make Indonesia independent in energy, the government is eager to reverse this trend.

SKK Migas data shows that the Abadi project will produce 9.5 million metric tons of LNG per year at its maximum, as well as 150 million standard cubic foot per day of pipeline gas and 35,000 barils of condensate.

Inpex controls 65% of the Abadi Project. In 2023, Pertamina Indonesia and Petronas Malaysia took Shell's 35% stake in the Abadi project. (Reporting and writing by Bernadette Cristina Munthe, Fransiska Nanangoy, Editing by Martin Petty & Christian Schmollinger).

(source: Reuters)