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Jakarta Post

After disagreements, Govt, Japan’s Inpex decide site for Masela block's LNG plant

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Wed, November 6, 2019   /   10:30 am
After disagreements, Govt, Japan’s Inpex decide site for Masela block's LNG plant Mega project: A worker carries out activities in a natural gas liquefaction facility at the Tangguh liquefied natural gas (LNG) plant in Bintuni Bay, West Papua, on Sept.21, 2015. (Tempo/-)

The government and Japanese oil company Inpex have determined Yamdena Island in the south-eastern Arafura sea as the location for a liquified natural gas (LNG) plant that will become a part of the multibillion-dollar Masela oil and gas block project.

The Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) said in a statement on Tuesday that it had sent a formal recommendation letter on the matter to the Maluku provincial administration, which governs Yamdena Island.

“We went there; we’ve spoken to the provincial administration and the administration is very supportive of this Masela project,” said SKK Migas spokesman Wisnu Wibawa Taher.

SKK Migas and Inpex as the block’s operator expect the LNG facility to be operational by 2027 and run until 2055. The facility is part of the company’s US$18 billion to $20 billion investment in developing the block.

Once the development is completed, the block is expected to produce 9.5 million tons of LNG per annum and 150 standard cubic feet per day (mmscfd) of gas. It holds 10.7 trillion cubic feet of proven gas reserves.

“I want the environmental impact assessment [Amdal] and land acquisition completed by 2020, so construction can begin the following year,” said Maluku governor and former policeman Murad Ismail.

Inpex and SKK Migas initially planned to finish development of the block by 2018 but disagreements related to the block’s development plan, including whether the LNG plant should be built onshore or offshore, pushed back the deadline to 2027

Inpex vice president for corporate services Nico Muhyiddin previously said the company was in the process of cataloging the needs of potential business customers.

“We are creating an assessment for potential buyers such as [state-owned gas distributor] PGN and [state-owned utility company] PLN, among others. We’ve asked them how much gas they need,” he said.