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Onshore LNG: Evaluating the options for Indonesia's Abadi

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Report summary

The future of the remote, 20-tcf Abadi gas field offshore Indonesia has become more uncertain. In March 2016, INPEX's proposed 7.5-mmtpa FLNG US$15 billion development was rejected by the Indonesian government, in favour of an onshore LNG plant to boost local content. However, the increased costs associated with an onshore development could have a significant impact on project economics. We estimate a 7.5-mmtpa onshore project generates an IRR of 9.9%, versus 14.6% for the FLNG concept. In the current industry environment, the PSC partners would be unlikely to take on the considerable risks of a remote greenfield development unless it has clear terms and robust economics. We compare several incentives Indonesia could implement to make the onshore development more attractive.

What's included

This report contains

  • Document

    Modelling assumptions.pdf

    PDF 106.85 KB

  • Document

    Onshore LNG: Evaluating the options for Indonesia's Abadi

    PDF 1.32 MB

  • Document

    Onshore LNG: Evaluating the options for Indonesia's Abadi

    ZIP 1.39 MB

Table of contents

  • Executive summary
  • Background
  • Project economics
  • Enhanced project options
    • Development risks
    • Corporate impact
    • Domestic petrochemical options
    • Implications for Indonesia
    • Conclusion

Tables and charts

This report includes 4 images and tables including:

Images

  • Location of the Abadi field
  • Cumulative contractor's cash flow
  • NPV and IRR
  • Government's share of revenue and contractor's IRR

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