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Jakarta Post

PLN, Pupuk Indonesia to buy LNG from Masela plant

  • News Desk

    The Jakarta Post

Jakarta   /   Thu, February 20, 2020   /   03:53 pm
 PLN, Pupuk Indonesia to buy LNG from Masela plant Japanese oil and gas company Inpex Masela is developing a US$20 billion LNG plant in the Masela oil and gas block in the Arafura Sea in eastern Indonesia (Courtesy of/maritim.go.id)

Japanese oil and gas giant Inpex Masela Ltd will sell part of its liquefied natural gas (LNG) produced from its LNG plant in the Masela oil and gas block in eastern Indonesia to state-owned electricity company PLN and sate-owned fertilizer producer PT Pupuk Indonesia.

The memorandum of understanding (MoU) on the sale of the LNG was signed in Jakarta on Wednesday by the president director of Inpex Masela, Kenji Kawano, the president director of PLN, Zulkilfi Zaini, and the president director of Pupuk Indonesia Aas Asikin Idat.

Speaking following the signing of the MoU, Energy and Mineral Resources Minister Arifin Tasrif said PLN planned to purchase between 2 to 3 million tons of LNG per year to supply its power plants, which at present are fueled with diesel.

Meanwhile, PT Pupuk Indonesia, the holding company of state-owned fertilizer producers, intends to buy 150 million standard cubic feet per day (mmscfd) of gas for 20 years to supply its fertilizer plants.

After years of delays, Inpex secured a final approval from the government in July 2019 to develop a US$20 billion LNG plant in the Masela Block in the Arafura Sea. The plant, which is expected to start commercial production in 2027, will produce 9.5 million tons of LNG per annum.

During the MoU signing ceremony, Upstream Oil and Gas Regulatory Taskforce (SKK Migas) head Dwi Soetjipto gave an assurance that the licensing process for the Abadi project had been going “smoothly”, and expressed hope there would be no further delays.

“So far, we have obtained a location permit from the local government, and the licensing process with the Environment and Forestry Ministry is going smoothly,” he said

He added that of the $20 billion needed for the Abadi project, around $5.6 billion would be spent on purchasing local content, which would spur economic growth.  (mpr)