Indonesia asks Inpex to re-propose Abadi LNG using onshore plant

TOKYO, April 4 (Reuters) -- Japanese oil firm Inpex Corp. said on Monday it has received a notification from the Indonesian government to propose a new development plan for the Abadi liquefied natural gas project based on using an onshore processing facility.

The notification was expected as President Joko Widodo last month rejected an earlier proposal by Inpex and its partner Royal Dutch Shell to build the world's largest floating LNG facility in the country's east for the Abadi project, saying an onshore plant would benefit the Indonesian economy more.

"We will carefully examine the contents of the notification, and intend to work closely with the Indonesian authorities aiming for the early start-up of development," an Inpex spokesman said, without elaborating.

The government's decision was a blow to the two energy firms, as well as to Indonesia's upstream energy regulator (SKKMigas), which had warned that rejecting the plan to process gas from the Masela field offshore would lead to delays and job cuts.

Inpex, Japan's biggest oil and gas developer, and Shell submitted a revised development plan to the Indonesian government last September, envisioning the adoption of a floating LNG plant with an annual LNG processing capacity of 7.5 million tons.

The Abadi field is located in the Masela block that is 65% owned by Inpex and 35% by Shell. State-owned Pertamina said last month it was interested in buying a stake of up to 20% in the block.

(Reporting by Yuka Obayashi; Editing by Christian Schmollinger)

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