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Jakarta Post
The Jakarta Post
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Masela preps told to proceed amid controversy

  • Raras Cahyafitri

    The Jakarta Post

Jakarta | Tue, October 13, 2015 | 05:35 pm

Amid ongoing assessment of the most beneficial option for the development of the gas-rich Masela block, the government has called on relevant parties to go ahead with their preparations to complete the projects on time, telling them to stay unperturbed by ongoing controversy.

Energy and Mineral Resources Minister Sudirman Said on Monday that the ministry had told contractors of the projects, Inpex Corp. and Shell, to progress on preparations so that the project was fruitful.

'€œWhether it is onshore or offshore, they still have to prepare the infrastructure, financing and team to work on this project. [...] What we are experiencing now is part of the dynamics and I'€™m not focusing on that noise,'€ the minister said.

The development of Abadi gas field at Masela block is currently in the spotlight following heated debate over whether the deepwater potential will be developed based on an offshore plan or instead be partly built onshore. The debate emerged recently after Coordinating Maritime Affairs Minister Rizal Ramli criticized the offshore development plan submitted by the project'€™s developer.

Rizal, who also oversees Sudirman'€™s ministry, argued that the country would benefit more from the project'€™s multiplier effect by building an onshore plant, instead of a floating liquefied natural gas (LNG) facility on the Arafuru Sea where the gas field is located.

It has been proposed that an independent consultant be appointed to assess the two options before the Energy and Mineral Resources Ministry makes a final decision.

Sudirman revealed that the appointment of a consultant was a direct order from President Joko '€œJokowi'€ Widodo.

'€œAt my level, I reserve judgment for the professional and technical aspects. I have delivered this to the President and he suggested that we hire a professional consultant,'€ Sudirman said.

Inpex is currently the operator of the block, owning 65 percent stake. The remaining 35 percent belongs to Shell. Masela POD was initially approved in 2010. However, the developers recently submitted a revision to the Masela plan of development to the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) following the finding of bigger gas resources. Under the revised plan, Masela proposed a capacity increase for the floating LNG plant to 7.5 million tons per annum from previously 2.5 million tons. As much as 10.7 trillion cubic feet in gas proven reserves is currently estimated there.

Figures from Inpex showed that the block had a surface area of about 3,221 square kilometers and that the field was estimated to have a range of 400 to 800 meters-deep. The sea also hosts trenches measuring 150m in width and up to 1,500m in depth. Given the geographical location, the Masela deepwater project has been said to be one of the most challenging projects in the country amid the current business environment and declining world oil prices.

Inpex said that it was awaiting approval of its revised plan, which has been recommended by SKKMigas to the Energy and Mineral Resources Ministry.

'€œAt the same time, we are preparing for the next phase of FEED [front end engineering design] preparations. Regarding the project schedule, we expect to reach the FID [final investment decision] stage in 2018 and complete the development in 2024,'€ Inpex spokesperson Arie Nauvel said.

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