The government has given Japanese oil company Inpex Corp and Dutch energy giant Shell a 27-year extension to develop the Abadi gas field in the southeastern part of the Arafura Sea.
Dwi Soetjipto, head of the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), confirmed with The Jakarta Post on Wednesday that he had signed a contract on the matter with company representatives in Jakarta last week.
Inpex wrote in a statement issued in June that the extension’s purpose was to “enable competitive project economics, taking into account the project’s long-term production outlook”.
The Abadi gas field is located in the Masela Block, 65 percent of which is controlled by Inpex, with the remaining 35 percent controlled by Shell. With the extension, the companies will operate the field until 2055.
The two companies plan to build an onshore liquefied natural gas (LNG) processing plant and supporting pipeline systems. Once operational, the field is expected to produce 10.5 million tons of natural gas each year, which includes 9.5 million tons of LNG.