Inpex Venture to Sell 10% Stake in Indonesian Abadi LNG Project

Inpex Corp., the Japanese operator of an Indonesian liquefied natural gas project, and its partners plan to sell at least 10 percent of their Abadi venture.

Naoki Kuroda, chairman of Japan’s biggest energy explorer, said in an interview last week that its contract with the Indonesian government contains a provision to sell a 10 percent stake to a company designated by local governments. Inpex, holding a 60 percent controlling share, is also considering selling smaller stakes to potential buyers of the fuel from the LNG project, said Masahiro Murayama, a company director.

Royal Dutch Shell Plc, Europe’s largest oil company, holds a 30 percent stake in Abadi stake. The company and Inpex plan to build a floating LNG plant in Indonesia, which would be its second LNG project. Inpex, working with Total SA, borrowed $20 billion last month for the Japanese company’s first LNG venture in Australia to tap growing demand from Asian power utilities.

The Abadi project will produce about 2.5 million metric tons of LNG a year in the first stage, taking in gas from the Arafura Sea’s Masela block. Inpex selected John Wood Group Plc to design subsea-production facilities for the project, it said Nov. 26. The timetable of commercial production and project costs are not yet determined.

Hadi Prasetyo, a spokesman for Indonesia oil and gas regulator SKKMigas, confirmed the proposed sale. Contractors are required to offer 10 percent interests to a company selected by local or regional governments under regulations issued in 2004, he said. PT Energi Mega Persada Tbk. owns a 10 percent stake in Abadi.

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