OIL AND GAS - JAKARTA. The government has set a target for Japan-based Inpex and Dutch Shell to conduct a preliminary front-end engineering design (pre-FEED) for the development of the gas-rich Masela block in the Arafura Sea in January and to complete it by April at the latest.
The pre-FEED is crucial to determine the location of the onshore liquefied natural gas (LNG) plant that will be built by Inpex and Shell, which currently hold 65 and 35 percent stakes in Masela, respectively.
“The pre-FEED should start this month [January] and it is expected to be completed within three months,” Deputy Energy and Mineral Resources Minister Arcandra Tahar said on Thursday in Jakarta.
“During the pre-FEED, two prospective locations will be assessed. After the most feasible one is selected, [Inpex and Shell] will be able to conduct the FEED study, which will later determine the production capacity [of the LNG plant].”
The government has given the companies two options for the LNG plant capacity: 7.5 million tons per annum (mtpa) with 474 million standard cubic feet per day (mmscfd) of gas or 9.5 mtpa with 160 mmscfd of gas.
Masela is estimated to be able to produce 1,200 mmscfd and 24,000 barrels of condensate per day for 24 years.
While the government is optimistic that the block can start operating by 2023, the previous plan on development (POD) estimated that the gas field could start production by 2024, and start piping gas in 2026, just two years before Inpex's and Shell’s contracts expire.
