OGJ Oil Diplomacy Editor
LOS ANGELES, July 22 -- Inpex Corp., acknowledging its need for floating LNG (FLNG) expertise, said it has signed an agreement with a unit of Royal Dutch Shell PLC to transfer a 30% stake on Masela Block in the Arafura Sea off Indonesia (called the Abadi Project; see map, OGJ, Feb. 5, 2001, p. 44).
Shell’s experience with FLNG “will help ensure the timely delivery of the Abadi project,” Inpex said. “It will also contribute largely to promote a wider collaborative relationship between Inpex and Shell on the Abadi project and other projects.”
Inpex said the plan of development was approved last December by the Indonesian government and that an FLNG plant will be constructed and utilized to produce 2.5 million tons of LNG in the first phase of development.
Inpex said it will continue to operate the project but that Shell will help ensure the timely delivery of the Abadi project due to its “extensive expertise and experiences in offshore production, gas liquefaction, LNG shipping and, in particular, its FLNG experiences.”
The Japanese firm underlined its view of Shell’s expertise, saying that the Anglo-Dutch firm recently demonstrated its leadership and delivery in FLNG activities by reaching a final investment decision on the Prelude FLNG project, calling it “the first FLNG project globally to reach development level.”
Shell agreed in May to build its first FLNG plant at the Prelude field off Australia at an estimated cost of $10.8 billion to $12.6 billion to meet rising Asian demand.
“Our decision to go ahead with this project is a true breakthrough for the LNG industry,” said Malcolm Brinded, Shell’s executive director, upstream international. “Our innovative FLNG technology will allow us to develop offshore gas fields that otherwise would be too costly to develop.”
That view was shared by Mark Greenwood and Dale Koenders, Sydney-based analysts at Citigroup Inc., who issued a report saying that Shell “may provide the technology to other companies to tap resources too small or too far from the coast to be profitably developed at onshore plants.”
Last month, Shell Development (Australia) Pty. Ltd. signed agreements with FMC Technologies Inc. for supplying subsea production and associated topsides systems as well as installation and commissioning services for the Prelude field development off Australia (OGJ Online, June 27, 2011).
Inpex Masela, operator, holds a 60% stake in the Abadi project, while Shell holds 30% and PT EMP Energi Indonesia holds the remaining 10%.
Contact Eric Watkins at firstname.lastname@example.org.