Inpex-SKK Migas Agrees On The Beginning Of The Eternal LNG Project Worth IDR 324 Trillion In RI

Blok Masela (photo: intermediate)

JAKARTA - Blok Masela Inpex operator Masela Ltd together with SKK Migas agreed to start the LNG Abadi project in Indonesia. The agreement was made after the Indonesian Government approved a revision of the Plan of Development (POD) which included a carbon capture storage (CCS) component into the POD revision.

This project is the first in Indonesia, where the costs related to CCS have been eligible to be included in cost recovery 1 based on a profit-sharing contract (PSC) scheme that regulates upstream oil and gas operations in Indonesia.

The investment in the Abadi Masela project reached 20.9 billion US dollars or around Rp. 324 trillion.

"Today will be a special one, because we will conduct a Kick Off Project Management Team Abadi Masela, marking the start of a very massive National Strategic Project (PSN)," said Head of SKK Migas Dwi Soetjipto in a written statement, Thursday, December 28.

Dwi is grateful that challenges after challenges can be overcome. He said that the progress of this project began with the entry of new partners, namely Pertamina and Petronas in November 2023.

"This project will generate government revenue of US$37.8 billion or equivalent to Rp586 trillion," he said.

He added that the LNG Abadi project is also proof of Indonesia's commitment to increasing production as well as reducing emissions. "Because the eternal gas field also has the potential for CO2 storage and even becomes a CCS Hub with CO2 injection capabilities of 71-80 million tons and storage capacity of 1.2 giga tons," said Dwi.

According to Dwi, if the Abadi Masela project can be accelerated, it will have the potential to accelerate project revenue revenues of around US$5 billion, or vice versa, if there is a delay, there will be the potential to increase project costs by around US$1 billion each year beyond the additional workforce costs.

"The progress of the LNG Eternal Project is highly anticipated by the government and the people of Indonesia, because it is one of the backbones to achieve the production target in 2030, namely, 1 million barrels of oil per day (BOPD) and 12 billion cubic feet per day (BSCFD) gas," he said.

Meanwhile, Managing Executive Officer Senior Vice President of Asia Projects Inpex Akihiro Watanabe said that his party really appreciates the support from SKK Migas and the Indonesian Government in revising PODs to include CCS, which is a good momentum for us.

"In the future, INPEX together with JVP will seriously implement the revision of POD through support and guidance from SKK Migas and the government," he added.

For your information, the annual LNG production volume of the LNG Abadi project is estimated to reach 9.5 million tons and is expected to contribute to increasing energy security in Indonesia, Japan and other Asian countries, as well as producing a stable supply of clean energy in the long term, based on the properties of leading gas fields in the world and abundant reserves that enable efficient development, as well as project CCS components.

In addition, this project is specifically expected to contribute significantly to the much-needed economic and social development in eastern Indonesia, as well as to achieve Indonesia's goal of zero CO2 emissions by 2060.