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Masela expected to operate in 2022
The gas-rich Masela block is expected to start commercial operations in 2022 despite lags in the development process.
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President Joko "Jokowi" Widodo speaks on the development of the Masela gas block in a press conference last year. The government says the block is expected to begin commercial operations in 2022. (Kompas.com/Indra Akuntono)
The gas-rich Masela block is expected to start commercial operations in 2022 despite lags in the development process.
Coordinating Maritime Affairs Minister Luhut Pandjaitan said on Wednesday that the front end engineering design (FEED) for the project would be completed this year, while the final investment decision would be concluded in 2019 at the latest.
“We hope commercial operations start in 2022," he said following a Cabinet meeting at the Bogor Palace in West Java.
Luhut further said based on the government’s decision, the contract of the block would be extended seven years after its expiration, set to occur in 2028.
(Read also: Govt wants Masela block construction to start in 2019)
The expansion aims to compensate time loss due to multiple revisions of the plan of development.
Japan-based Inpex and Dutch Shell, which hold a 65 and 35 percent stake in the block respectively, had previously requested a 10-year extension of the contract after the government chose onshore development of the facility.
Luhut further said the anticipated capital expenditure would reach a maximum US$16 billion, down from the previous projection of $22 billion.
Inpex senior communications and relations manager Usman Slamet declined to confirm the terms announced by Luhut.
"We are still discussing it with the Energy and Mineral Resources Ministry and the Upstream Oil and Gas Regulatory Special Task Force [SKKMigas] and we hope that we will soon reach an agreement with the government so that the project can commence soon," he told The Jakarta Post. (lnd)
