Inpex, Indonesia's PLN extend MoU on LNG supply

Japan’s Inpex has extended a memorandum of understanding (MoU) with Indonesian utility PLN concerning long-term LNG supply and expanded the MoU to incorporate joint studies in hydrogen, ammonia and CCS in relation to the Abadi LNG project, the company said on September 27

Inpex plans to supply LNG from the Abadi project to natural gas-fired power plants in Indonesia owned and operated by PLN. Inpex and its partner, Shell, are currently conducting a study on the introduction of CCS and cost reduction and are considering the production of blue hydrogen and ammonia using natural gas produced from the project.

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The scope of the MoU includes conducting joint studies on supplying blue hydrogen and ammonia using natural gas produced from the project as co-firing fuel for thermal power plants in Indonesia that PLN owns and operates, as well as on the capture and transport of CO₂ emitted from thermal power plants in Indonesia and the storage of this CO₂ in the Abadi gas field.

“This initiative is expected to contribute to realising PLN’s achievement of net zero emissions by 2060,” Inpex said.

The $20bn Abadi LNG project is expected to produce 9.5mn metric tons/year of LNG. The project plan has undergone a number of changes in recent years. Initially, the development of the Masela offshore block involved a floating LNG plant. In March 2016, the country's president Joko Widodo said the LNG project will be built onshore, instead of offshore as Inpex had proposed. As a result, the Japanese company had to review its plans. 

Inpex owns 65% of the Abadi project while Shell owns the rest 35%. According to reports, Shell is looking to divest its stake in the project.