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Inpex readies FEED race for Abadi LNG

Japanese operator expected to offer four main elements for Indonesian project

Inpex is keeping oilfield services players on their toes as the Japanese independent prepares for the front-end engineering and design phase of its Abadi liquefied natural gas project in Indonesia.

The operator has not put an explicit timeline on when FEED is expected to start but well-placed sources said bidding should get under way in late 2019 or early next year.

It is understood Inpex is issuing market surveys to companies that are expected to be contenders for the FEED work and the subsequent engineering, procurement and construction stage.

There are four main elements of the Abadi project, and for one or more of them the FEED contractor could also become the EPC contractor.

Four FEED contracts are expected to be offered: A large floating production, storage and offloading vessel; an onshore liquefaction plant; offshore gas export pipeline and the subsea umbilicals, risers and flowlines.

It remains to be seen whether Inpex selects companies to carry out parallel FEED studies or to compete traditionally for the FEED contracts.

Abadi LNG has gathered momentum after the Indonesian regulator recently approved the revised Plan of Development and sources said the number of recent market surveys lends weight to Inpex preparing for FEED.

Pre-FEED work last year was carried out by KBR for the liquefaction facilities, TechnipFMC on the FPSO and Chiyoda with Synergy Engineering for the SURF and gas export pipeline.

The 9.5 million tonnes per annum onshore LNG facility is expected to be the subject of a FEED competition — as was the case with BP’s Tangguh Train 3 project — with the successful contractor or consortium subsequently being awarded the EPC job.

Japanese contractors JGC and Chiyoda could be interested in vying for the FEED-EPC for the liquefaction plant, likely in partnership with local outfits.

The strategy of FEED rolling into EPC might also apply to the large FPSO. An earlier contractor meeting regarding the floater is understood to have attracted potential bidders including SBM, Modec, BW Offshore and McDermott International.

However, cabotage and local content issues mean that some players may tie up with Indonesian contractors.

The Abadi FPSO is envisaged as being able to handle 1.8 billion cubic feet per day of gas and have the capacity to process 36,000 barrels per day of condensate.

The FEED and EPC scopes of the subsea components are more likely to be kept separate, said sources.

Abadi’s offshore and onshore spoils are also expected to tempt the likes of Italy’s Saipem, which could carry out fabrication at its Karimun Island yard in Indonesia.

McDermott of the US also has an Indonesian facility — a 119-hectare yard on Batam Island.

Inpex and joint venture partner Shell in July received approval of their revised PoD.

The Japanese player said in response that it aims to make the project competitive “and will continue to work toward the production start-up scheduled in the latter half of the 2020s”.

Inpex added that the immediate plan was to work with Shell to prepare for the FEED phase.

Operational personnel would be mobilised and bidding-related work would be done for the selection of FEED contractors, said Inpex, which intends to bring lessons learned from its challenging Ichthys LNG project in Australia to Abadi.

Takayuki Ueda, Inpex's chief executive, said in July: "While the project’s development concept has been changed from a floating LNG scheme to an onshore LNG scheme, I am confident that the economics of the project based on the revised PoD are now sufficiently strong for Inpex and Shell given the PSC term until 2055 and sufficient financial conditions have been secured following a series of constructive discussions with the authorities."

The Abadi field contains estimated reserves of at least 10 trillion cubic feet of gas.

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