TEMPO.CO, Jakarta - The Energy and Mineral Resources Ministry has agreed to continue the development of natural gas project at Masela Block located in Arafura Sea, Maluku, un cooperation with Inpex.
"We've reached an agreement on the project last Friday,” Director of Engineering and Environment at the Directorate General of Oil and Gas, Djoko Siswanto said on Thursday, December 29, 2016.
Djoko said that Inpex has requested for a 10 year contract period for the project. Previously, development of the Masela Block project was hampered because the government rejected Inpex’s suggestion to process the liquefied natural gas at the floating LNG.
President Joko "Jokowi" Widodo wants the gas to be processed at an onshore refinery. The rejection forced Inpex to change their development plan.
Other than an extended production time period, the Japan-based company also requested for an increase in production capacity from 7.5 million tons to 9,5 million ton per year. The company also requested for cost recovery on the project's feasibility study of US$ 1,2 billion.
Deputy Minister of Energy and Mineral Resources Arcandra Tahar confirmed the agreement but stated that the government is still waiting for a letter from Inpex in relation to the project's development plans.
"We'll wait for them to send us a letter of response,” Arcandra said.
Inpex spokesman Usman Slamet, explained that Inpex is currently planning their next course of action before the government make a decision on the continuation of the project. However, Usman refuaed to provide a detailed explanatin in when the letter will be sent. "For the moment we're preparing a letter as requested by the Deputy Minister of Energy," Usman said.
ANGELINA ANJAR | ROBBY IRFANY