INPEX extends MOU on LNG supply to Indonesian domestic market

September 29, 2022

INPEX Extends MOU on LNG Supply to Indonesian Domestic Market and Incorporates Joint Studies in Hydrogen/ammonia and CCS for Abadi LNG Project, Masela Block, Indonesia

NPEX announced that through its subsidiary INPEX Masela, Ltd., and on behalf of its joint venture partner Shell Upstream Overseas Ltd. (Shell), it has extended a memorandum of understanding (MOU) with PT PLN (Persero) (PLN) concerning long-term liquefied natural gas (LNG) supply and expanded the MOU to incorporate joint studies in hydrogen/ammonia and CCS in relation to the Abadi LNG Project (the Project). The MOU was signed at the Second Asia Green Growth Partnership Ministerial Meeting organized by Japan’s Ministry of Economy, Trade and Industry (METI) and held in Tokyo, Japan on September 26, 2022.

As announced on February 20, 2020, INPEX plans to supply LNG from the Project to natural gas-fired power plants in Indonesia owned and operated by PLN over the long term. INPEX thereafter signed an MOU with PLN to initiate talks on LNG sales and procurement and the parties have been conducting discussions based on the MOU, which was extended and expanded today with a view to future collaboration in the fields of hydrogen/ammonia and CCS.

To make the Project clean and competitive in service of the energy transition, INPEX and its partner are currently conducting a comprehensive study on the introduction of CCS and cost reduction. To make further use of CCS facilities, INPEX and its partner are considering the production of blue hydrogen and ammonia using natural gas produced from the Project.

The scope of the MOU announced today 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 realizing PLN’s achievement of net zero emissions by 2060.

The joint studies outlined in the MOU is also linked to the Asia Energy Transition Initiative (AETI), a plan unveiled by the Government of Japan in 2021 that aims to help achieve sustainable economic growth and carbon neutrality in Asia through the energy transition, and the concept of “Asia Zero Emissions Community” that the Japanese government is aiming for. The studies are expected to generate energy transition business opportunities including clean energy such as low carbon solutions and hydrogen and ammonia.

As outlined in its Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022) announced in February 2022, INPEX aims to expand its 5 net-zero businesses, including developing a hydrogen business and promoting CCS as well as making its oil and natural gas business thoroughly clean. INPEX seeks to proactively engage in energy structure reforms towards the realization of a net zero carbon society by 2050 while responding to the energy demands of Japan and other countries around the world. The MOU announced today is aligned to these objectives.