Special Report 2: Abadi LNG Project

Masela Block

Abadi production test

Abadi gas fieldAbadi
LNG Project

Development of the Abadi Gas Field
Production of the Abadi Project

LNG project employing
the world's ﬁrst ﬂoating LNG technology
Full-scale progress through a strategic partnership

Planned production at Abadi is 2.5 million
tons/year of LNG and 8,400 bbl/d ofcondensate.
This scale of production wasapproved for Phase 1 development by
the Indonesian Government in December
2010. Phase 1 development is planned
for the Northern area of the block wherereserves are concentrated. A feasibility
study for further development iscontinuously being conducted based ongas reserves.

Floating LNG Technology
The Abadi gas ﬁeld is located in the Arafura Sea in Indonesian
territorial waters, approximately 2,600 km east of Jakarta, thecapital of Indonesia. The ﬁeld is classiﬁed as a giant gas ﬁeld
with an area of more than 1,000 km2. Development basedon the “ﬂoating LNG” concept is being studied, and we arecurrently preparing for Front-End Engineering and Design(FEED) and related preparatory development work.

30kmofﬂoaded) concept. A ﬂoating LNG iscreated by installing an LNG plant ona large vessel. This new method allows
for natural gas to be processed intoliquid at that plant and then directlyofﬂoaded to an LNG carrier. A numberof oil companies, notably the oil majors,
are looking into commercial use of such
FLNGs or are preparing to constructthem.
A ﬂoating LNG eliminates the needfor some conventional equipment, suchas pipelines, and therefore requires
less initial investment and minimizes
environmental impact.

Jakarta OfﬁceAbadi
LNG ProjectINDONESIA

The plan of development for the Abadi
Project is based on the “ﬂoating LNG”
(a ﬂoating offshore facility where natural
gas is processed, liqueﬁed, stored andProject Overview“Abadi” means “eternal” in Bahasa
Indonesia. The name was assignedin the hopes of “burning forever.”Floating LNG at Abadi

Production volume LNG 2.5 million tons/year (First phase development)(expected):
Condensate approx. 8,400 bbl/dInterest owned*:

INPEX 60% Shell 30% PT Energi Mega Persada 10%

Project status:

Preparation for development

LNG Tanker*In July 2011, INPEX signed an agreement with Shell for transfer of a 30% participating interest. The transaction
is subject to the satisfaction of certain conditions such as the approval of the Indonesian Government.

Image of Abadi FLNG

Project History
INPEX acquired a 100% participatinginterest in the Masela block in November
1998 through a public tender conductedby the Indonesian Government. INPEX
proceeded with the exploratory activity
as the operator, and an exploratory welldrilled in 2000 discovered the Abadi gas
ﬁeld. This marked the ﬁrst discovery ofoil and natural gas in the Arafura Sea,Indonesia. Subsequently, six appraisal
wells were drilled (two in 2002 and four
more in 2007-2008) so as to gain a moreaccurate estimate of the reserves. All ofthe wells conﬁrmed the presence of a
sufﬁcient gas and condensate column.
In parallel with these activities,
concept selection studies of development
options were carried out. We submitted
a plan of development (POD) basedon our studies in September 2008,
and subsequently received approvalin principle for it from the Indonesian
Government. Afterward, taking into044

INPEX CORPORATION Annual Report 2011

Structure of the Abadi gas field

Contribution to Regional Communityconsideration a third-party evaluationof the POD implemented by theGovernment, it was determined thatphased development of the Abadi gas
ﬁeld would be appropriate, with the ﬁrst
phase consisting of development as a“ﬂoating LNG” with a capacity of 2.5
million tons/year of LNG. The Indonesian
Government granted its approval tothe plan of development (POD-1) inDecember 2010. INPEX is currently
conducting preparations for FEEDand Environmental and Social Impact
Assessment (AMDAL) procedures, and weare continuing to make preparations fordevelopment.
In the course of moving toward fullscale development, we had been looking
into forming a strategic partnership witha company with experience and provenresults in the LNG business and largescale offshore development, which could
contribute to the success of this project.

As a result, INPEX chose to invite RoyalDutch Shell onboard as our strategic
partner in the Abadi Project, and signed
an agreement with the subsidiary ofShell to transfer part of our participatinginterest (30%) in July 2011.

Project History

As part of our efforts to contribute to
local communities, INPEX donated 2,000books, etc., to a local library in Saumlaki
city in Maluku, one of the candidate
locations for the Abadi Project logistics
base, in 2010, at the local community'srequest. From April 2011, INPEX andPattimura University are carrying out anempowerment program for the seaweed
farmers in Selaru Island in Maluku.

Our other activities in Indonesia
include donations to relief efforts after theWest Sumatra Earthquake and our ongoingsupport of exchange students through theINPEX Scholarship Foundation. In addition,
we work to improve the understanding of
the contributions of the Abadi Project toIndonesia by participating in conferencesand exhibitions throughout the country.

Donation to local library in Saumlaki City

1997– 2000

2001– 2002

2003– 2007

2007– 20082010

Future Milestone

Participated in an open bid,permit acquired

Drilled appraisal
wells

Reserves conﬁrmation

Studies of ﬂoating LNG▶ Submitted a bid for the Masela block at a
public tender conducted by the IndonesianGovernment; A production-sharing contract(PSC) for the block was concluded▶ Drilled the Abadi-2
and Abadi-3 appraisal
wells over a period ofabout seven months
beginning in March
2002 to appraise theextent of the structure▶ Conducted a reserves evaluationand concept selection studies ofdevelopment options▶ Conducted pre-FEED work
for a ﬂoating LNG

Government approvalof the POD-1▶ FEED▶ AMDAL(Environmentaland Social ImpactAssessment)▶ Conducted a seismic survey; Conﬁrmed thepresence of gas and condensate by drillingan exploratory well

▶ Drilled four additional appraisal
wells from May 2007. Conﬁrmed
the extension of gas andcondensate pools▶ Submitted a POD to theIndonesian Government in
September 2008

▶ Transfer of a 10%
participating interest toPT Energi Mega Persada▶ Approval of POD-1
was granted by theIndonesian Government▶ FID▶ Production start

INPEX CORPORATION Annual Report 2011045