Indonesia Considers Inpex Request To Boost Masela LNG Output Again
JAKARTA, Oct 21 (Reuters) - Indonesia expects to decide within "one or two weeks" on a plan by Inpex Corp to increase proposed output from the Masela natural gas field to nearly four times the level originally slated, a senior energy official said on Friday.
"We are still discussing the capacity of Masela - between 7.5 mtpa (million tons per annum) and 9.5 mtpa," said Coordinating Maritime Minister Luhut Pandjaitan, referring to discussions between the government and Inpex along with its partner Royal Dutch Shell PLC.
The minister, who oversees resources, said that a decision would likely come in the next couple of weeks.
A spokesman for Inpex in Jakarta confirmed the discussions. "There are several conditions we need for this project to be investable," he said, though he did not confirm the proposed output increase.
This would be the second time Inpex, Japan's biggest energy developer and Shell, the world's top LNG trader, have proposed an increase in output from the deep sea field in eastern Indonesia that was initially expected to produce 2.5 million tons per year (mtpa) of LNG.
President Joko Widodo in March rejected a $15 billion plan by Inpex and Shell to develop the world's largest floating LNG facility to process gas from Masela, saying an onshore plant would benefit the local economy more.
The move was a blow to both companies and pushed the anticipated start of production from the field into the late 2020s.
An onshore LNG plant will now be developed on either the islands of Aru or Saumlaki, Pandjaitan said, which is hoped will spur construction of petrochemical and fertilizer plants in the eastern province of Maluku, an impoverished area with little development.
"One of these two locations will be chosen," he said. "We don't just want to develop petrochemicals there. We also want to develop the fishing industry and tourism."
Indonesia gets priority on a large portion of domestically produced liquefied natural gas (LNG), but development of infrastructure to absorb the fuel has been slower than hoped both locally and abroad, putting pressure on gas prices.
Inpex is also working with BP, Mitsubishi Corp, China Natinoal Offshore Oil Co and other companies on an $8 billion expansion of the Tangguh project in West Papua province that will boost the project's annual LNG production capacity by 50 percent.
Questions remain on how quickly Indonesia can develop infrastructure to absorb gas from these projects, with at least 60 uncommitted cargoes this year and next.
(Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing by Joseph Radford)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- These Factors Helped Brent Oil Price Break Above $85
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Gaz System to Acquire Gas Storage Poland
- Subsea7 Secures Contract to Service Woodside's Trion
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- TotalEnergies to Acquire TLCS Eyeing Bayou Bend CCS Project
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension