JAKARTA (TheInsiderStories) – Indonesia’ government has approved the latest revision of plan of development (PoD) of Masela block in the Arafura Sea North Maluku to bring the gas-rich block development entered the final investment decision (FID) stage, the energy and mineral resources ministry announced on Friday (07/12).
The revision was approved after the task force had consulted with the Corruption Eradication Commission to prevent potential corruption, soon after the energy minister (MEMR) Ignasius Jonan signed the final revision.
“The minister inked the final PoD, and now he’s going to bring the news to the President Joko Widodo, as it’s a project that involves a big investment sum,” upstream oil and gas regulatory task force chairman Dwi Soetjipto said in Jakarta.
The former boss of state-owned energy giant PT Pertamina, further said the head of agreement on the development of the gas block was signed by Minister Jonan and Japan’ Inpex Corp., CEO Takayuki Ueda in Tokyo in May. The FID stage will lead to the final decision on the block’s development, with Inpex Corp, a Japanese oil company, as the operator.
Soetjipto said the now-signed revision settled, among other things, terms of the production-sharing contract (PSC) period, financial conditions and cost estimations. The FID process, according to him, was to be completed within a year after the revised PoD was signed, meaning early in the second half of next year.
He was upbeat that the signing would move forward the project, which also involves building an onshore liquefied natural gas (LNG) plant, to complete in a timely manner by 2027.
Previously, Inpex as the block’s operator and the government agreed on an estimated investment cost of US$18-20 billion for the Masela block’ development. A series of changes to the plan in the past years, such as whether the LNG plant should be built onshore or offshore, has delayed the project.
The initial plan was to finish development of the project in 2018, a target that has since moved back to 2027, just one year before the Masela block’ PSC ends.
Once the development is completed, which is estimated to be in the second quarter of 2027, the block could produce 9.5 million tons of LNG per annum and 150 standard cubic feet per day of gas.
The project is crucial for national energy security, with the government recently estimating that the country might be in short supply of gas by 2025. The Masela block holds 10.7 trillion cubic feet of proven gas reserves.
Written by Willy Matrona, Email: firstname.lastname@example.org