Inpex, Shell committed to Masela project

JAKARTA. After their preferred plan for an offshore scheme was effectively turned down, Inpex and Shell, the investors in the Masela gas block project, remain committed to proceeding with the new onshore development plan for the deepwater block, according to the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas).

SKKMigas head Amin Sunaryadi said his office had held a meeting with both investors shortly after President Joko “Jokowi” Widodo announced the chosen development scheme for the project. He asked Inpex to adjust its plan of development (POD), including the time frame.

“SKK concluded, after discussion, that Inpex and Shell have no plans to withdraw [as contractors] from the Masela block. They will remain in the block, but they need time to recalculate the onshore scheme,” Amin said during a press conference in Jakarta on Thursday.

As for the liquid natural gas (LNG) plant's location, he continued, Inpex and Shell would discuss the matter internally before sending a new work plan to the agency. “We have not discussed the location yet, as the decision was just made yesterday,” Amien said.

The Masela block is located in the Arafuru Sea, Maluku. The nearest islands are Selaru and Yamdena islands in the Tanimbar Islands, 180 kilometers from the block. Meanwhile, Wamar Island in Aru Islands is located 600 km from the block.

In the initial POD, a floating LNG plant was to be built to process gas from the block. The proposal, defended by Energy and Mineral Resources Minister Sudirman Said, was publicly denounced by Coordinating Maritime Affairs Minister Rizal Ramli, who supported an onshore plant to maximize regional development in the Maluku region.

Sudirman instructed SKKMigas to immediately follow up on the decision, ending the seven-month polemic, and to reassess the block development based on the scheme chosen by the President.

“I want to underline that [the construction of] this project will take eight to 10 years. It would be unwise to continue the polemic. There must be a reconciliation to let the investors get back to their work,” Sudirman said, adding that SKKMigas must increase communication with regional administrations.

Amin added that SKKMigas had also arranged a meeting with representatives of Pertamina and Inpex to discuss the possibility of the state-owned energy company joining the Masela project. “The meeting discussed a potential alliance. Masela requires a domestic market and Pertamina has a great capacity to address that,” he added.

The Masela project plan was developed after the signing of a production sharing contract in 1998. The first POD was approved by the Energy and Mineral Resources Ministry with total gas reserves of 6.97 trillion cubic feet (tcf). In 2013, new gas reserves were found, making a total of 10.73 tcf and leading to the POD revision. (Ayomi Amindoni)