President: Masela block production facilities to be built onshore

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President Joko Widodo delivers a speech  at the Energy Ministry's project contracts signing. (image : Cabinet Secretary)

JAKARTA (TheInsiderStories) – President Joko Widodo said he has decided production facilities of Masela LNG project will be built onshore, instead of offshore as proposed by Inpex Corp, the operator of the block.

“After receiving various inputs and that since this is a long term project involving hundreds of trillions of rupiah, therefore based on calculations and considerations that I have made, we have decided (production facilities) to be built onshore,” President Joko Widodo said.

He said the government hopes this project will help developing the region’s economy.



The decision is a swift change on part of the President because only late last month, the President said the decision whether the production facilities of the Abadi Field within Masela Block to be developed onshore or offshore will be made in 2018.

“It will be decided in 2018. the decision on investment will be done in 2018,” President Widodo said at the office of the Energy and Mineral Resources Ministry.

“Therefore, we need time to give room to investors (to study) whether it is better to develop onshore or offshore (production facilities,” he said.

Inpex has submitted the revised Plan of Development (PoD) for Abadi Field in Masela Block worth around US$14 billion in second half last year. The Energy and Mineral Resources Ministry (ESDM) earlier attempted to approve the PoD in October last year.



However, the public debate over whether the operator should develop onshore facilities or floating LNG (FLNG) facilities has caused the approval to be delayed.

Currently, Inpex holds 65 percent working interest in Masela Block and the remaining 35 percent is held by Shell.

The block contains huge gas reserves of around 10.7 trillion cubic feet (tcf). Block Masela covers 4,291.35 square kilometers area, about 800 km to the east of Kupang town, the capital of NTT and over 400 km from Darwin, Australia at water depth of 300-1,000 meters. (*)

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Source: The Insiderstories
President: Masela block production facilities to be built onshore

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