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n a marked contrast to his quick decision on the US$5.5 billion Jakarta-Bandung high-speed railway project, President Joko '€œJokowi'€ Widodo seems to have been unwisely slow in making his decision on the Masela gas block development project in Maluku province.

The decision on the Masela project should have been made last October, based on the recommendation from the Upstream Oil and Gas Regulatory Agency (SKKMigas). But as a result of arguments put forward by Coordinating Minister for Maritime Affairs Rizal Ramli, President Jokowi decided to seek a second opinion and the government hired US consultants Poten & Partners to assess which of the two alternatives'€”an offshore or onshore plant'€”is the most commercially feasible development for the project.

The independent consultants recommended last December an offshore liquefied natural gas (LNG) plant, similar to the plan of development submitted by Inpex and Shell, the operators/investors of the Masela block which was approved by SKKMigas. But once again, the President postponed his decision. Jokowi convened another limited Cabinet session on Monday specifically to assess the project only to opt for another adjournment.

We fully agree with the President'€™s opinion that the project should generate the greatest benefit to the Indonesian people. But this should not have caused such protracted decision-making because the Inpex-Shell project proposal, based on a two-year study, was already sufficiently comprehensive. We support his search for an independent opinion, but why, even after the recommendation has been made, has the President still hesitated to make a decision, saying he still wants to meet personally with the top executives of Inpex and Shell?

The feasibility study by Inpex concludes that it is better the Masela LNG plant, with an annual capacity of 7.5 million tons, be built offshore because development and construction will cost only about $14.8 billion, as opposed to $22.3 billion for an onshore plant. Moreover, the construction of an offshore plant would be much speedier. The lower cost will generate $9 billion in extra revenues for the government for the period of the project.

But Rizal'€™s team of energy analysts argued that the multiplier impact on domestic industries would be much greater if the project was built onshore, and the onshore LNG plant could be supplemented with a petrochemical industry complex on Aru Island or another island near the Abadi gas field.

Whatever will be the final decision, another delay in developing the Masela project will damage investor confidence in the government'€™s policy- and decision-making capability. For sure, deciding on an onshore LNG plant will take a longer time because another detailed feasibility study will have to be made not only into the LNG plant itself but also the petrochemical complex. Moreover, if Inpex agrees to turn the project into an onshore LNG plant, the oil companies will have to totally change their sizable working team in Indonesia, which is now dominated by experts in offshore plants.

But since we are talking about the multi-billion-dollar gas business, decisions on the LNG project should be based on commercial feasibility: Who will buy the LNG, at what price and for what period of time? If these questions cannot be answered with firm gas sales contracts, no creditors will be willing to finance the huge project.

If the decision is not taken soon, the gas market may have become flooded by supplies from Australia, Qatar, Angola, Mozambique and other emerging LNG producer countries by the time the Masela plant comes on stream.