INTERVIEW: Indonesia to finalize presidential CCS/CCUS regulation by year-end

The Indonesian government intends to finalize a presidential regulation on carbon capture and storage (CCS) and carbon capture utilization and storage (CCUS) by the end of 2023, Dadan Kusdiana, secretary general of the country's Ministry of Energy and Mineral Resources, told S&P Global Commodity Insights.

"We are targeting [the regulation] to be finalized this year otherwise the project of Tangguh [CCUS] will be delayed," Kusdiana said in an interview on the sidelines of the Tokyo GX Week 2023.

"We have a project called Tangguh CCUS with a potential CO2 of 25 million to 33 million mt for 10 to 15 years," Kusdiana said. "We are targeting to be on stream in 2026."

Kusdiana said that the Tangguh CCUS project is among projects in the advanced stage for introducing CCS and CCUS in the form of enhanced gas recovery in the country.

"Most advanced in terms of implementation, we have Tangguh and the other one is Abadi, Masela," he said.

With a total of 16 CCS/CCUS projects in the pipeline, "the total potential implementation of CCS and CCUS in 2030 and up to 2035 is targeted to be between 25 million and 70 million mt," Kusdiana said.

Tangguh, Abadi

The BP operated Tangguh LNG EGR/CCUS project is currently in the midst of front-end engineering design, or FEED, with an eye on coming onstream in the middle of 2026.

Tangguh LNG EGR/CCUS itself will have three injection wells, one offshore injection platform, one offshore CO2 pipeline, and onshore facilities for CO2 removal, processing, and compression, according to BP.

The Tangguh LNG Train 3 is expected to start commercial production at the end of 2023, Tutuka Ariadji, the Indonesian ministry's director general of oil and gas said Sept. 5.

Tangguh LNG is a unitized development of six gas fields located in Bintuni Bay, in the Papua Barat or West Papua province in far east Indonesia. The government has extended the Tangguh production sharing contract to oil company BP for 20 years to 2055. It has two trains with a capacity of 3.8 million mt/year each and Train 3 will add another 3.8 million mt/year.

Indonesia aims to start Abadi LNG production at the end of 2029 after completing a revision of the plan of development, following a reshuffle at stakeholders, Ariadji said.

The project partners -- INPEX, Petronas and Pertamina -- have agreed "on revision of the plan of development" with an aim to finish the revision this year, he said.

The Abadi LNG project, operated by INPEX with a 65% stake, comprises an onshore LNG plant that will be fed with gas from the Abadi gas field in the offshore Masela block being developed as part of the project.

The Abadi project is expected to produce about 9.5 million mt/year LNG and up to 35,000 b/d of condensate. It will also supply 150 MMcf/d of natural gas by pipeline to the domestic market.

Regulation in steps

When asked whether Indonesia plans to mandate the implementation of CCS and CCUS on oil and gas projects, Kusdiana said: "well to some extent, we are promoting the CCS and CCUS. We do not put this as mandatory I believe that now there is no choice" for the oil and gas industry to implement such decarbonization steps.

"This regulation will not put too many technical aspects," he said of the expected presidential regulation. "This regulation will provide the basic understanding for all sectors since we are also targeting to use our potential to storage for CO2 coming from outside -- the cross-border CO2."

"Then it will be followed by the ministerial regulations in very technical and implementing procedures."

Indonesia's energy sector is projected to be the country's largest greenhouse gas emitter by 2030, as well as contribute to emissions reductions, ranking second after forestry and other land use sectors.

Indonesia plans to develop an "Integration Cluster" for end-to-end CCUS services, based on studies showing that the country has the storage potential of 80 to 400 gigatons of CO2 in depleted reservoirs and saline aquifers, according to government data.