Masela Potential Buyers Include Petrochemical and Fertilizer Industries

Furthermore, the government will strongly consider Inpex’s request for a cost recovery worth US$1.2 billion following an audit.

Indonesian oil and gas company Pertamina is eyeing a stake in an FLNG development in the Arafura Sea, off Indonesia. According to Reuters, Pertamina is interested in buying a share in the Inpex-operated Abadi FLNG project located in the Masela Block, where first gas production originally is slated for 2018, will kick off in 2022. (http://www.offshoreenergytoday.com/)

The Industry Ministry has said it sees potential customers for gas produced by the Masela block in the Arafura Sea among fertilizer and petrochemical businesses.

Those industries will be developed once the location of the Masela field’s onshore liquefied natural gas (OLNG) plant is decided, Industry Minister Airlangga Hartarto said following a meeting at the Coordinating Maritime Affairs Ministry in Central Jakarta on Monday.

Following a long-drawn tug of war between the government and Masela’s contract holders, the former has ordered Inpex and Shell to conduct a single-phase pre-front end engineering design in order to determine the plant’s location and capacity as well as the gas’s buyers.

The gas-rich Masela block is estimated to be able to produce 1,200 million standard cubic feet per day (mmscfd) and 24,000 barrels of condensate per day for 24 years.

While the government believes the block can start operating by 2023, a previous plan estimated that it could start production by 2024, and start operating in 2026, just two years shy of Inpex’s and Shell’s contract expiration.

The government has promised to amend their contract with an additional seven years.

Furthermore, the government will strongly consider Inpex’s request for a cost recovery worth US$1.2 billion following an audit. (bbn, Fedina S. Sundaryani, The Jakarta Post)