Indonesia to Decide on Abadi LNG Project Development Option Early Next Year

Indonesia will make a decision on the development option for the Abadi liquefied natural gas (LNG) project in the Masela Production Sharing Contract (PSC) in the Arafura Sea, eastern Indonesia after evaluating the results of an independent study on the project, a senior official of the country’s Ministry of Energy and Mineral Resources (MEMR) said Wednesday on the sidelines of the Gastech 2015 Conference and Exhibition in Singapore.

“We are looking for a consultant right now to give us advice in making an apple to apple comparison but in a quantitative way to make a decision on which one (development option) is the best for the country and best for the investors,” MEMR Director General for Oil and Gas I Gusti Nyoman Wiratmaja Puja told Rigzone.

He explained that an earlier study done on the development option for the Abadi project was “not very quantitative for the onshore but very quantitative for the FLNG (floating liquefied natural gas), so we need a comparison from an independent consultant.”

“We hope (the study by the consultant will) end this year, maybe February or March (the government) will make a decision (on Abadi gas development option),” Wiratmaja Puja said.

Confusion about the Abadi project surfaced in September after differences emerged within the Indonesian government over its development option. This followed a suggestion by Indonesia’s Coordinating Maritime Affairs Minister Rizal Ramli to construct an onshore LNG plant on Aru Island as it would be more efficient and sensible.

Ramli’s proposal, which comprises a 373-mile (600-kilometer) pipeline to connect the Abadi gas field with the onshore Aru LNG plant, would cost between $14.6 and $15 billion, compared to $19.3 billion for the FLNG scheme, local media The Jakarta Post (TJP) reported Sept. 25.

According to same TJP report, Indonesia’s upstream regulator Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) however provided a different development cost for the Abadi project. It estimated that the FLNG concept will cost $14.8 billion in investment, below the more than $19 billion for the onshore scheme.