Indonesia picks onshore for Abadi, cancels FLNG

On 23 March 2016 the President of Indonesia announced that the INPEX-operated Abadi field will be developed as an onshore LNG development, on the basis that it would bring greater benefit to local communities and enable a higher local content in comparison to an FLNG development. This decision implies the rejection of the 7.5 mmtpa FLNG development plan which was submitted in September 2015 by INPEX. The onshore concept was chosen despite internal and external (commissioned) studies recommending FLNG as a more cost-effective choice for the remote field in the Timor Sea. This highlights a growing trend of upstream politicisation in Indonesia, and sends a negative signal for future upstream investment in the country.