Two Ministers clashed, Inpex: Masela Project is right on Schedule

KATADATA - The polemic of the plan of development for Masela Block in Arafura Sea has triggered several open clashes between Maritime and Resources Coordinating Minister Rizal Ramli and the Energy and Mineral Resources (EMR) Minister Sudirman Said. However, Inpex Corporation as the operator or manager of the oil and gas block is optimist that the condition would not affect the project’s schedule. 

Inpex’s Corporate Manager Communication Ari Nouvel said that the plan of development of Abadi Field, Masela Block, would be finished before the year is over. And then, Inpex Masela Ltd as the direct operator of Masela Block is hoping so that the company can complete the Final Investment Decision (FID) in 2018. 

“Regarding the schedule of the project, until now it’s still the same,” Ari said to Katadata, Thursday (15/10). If the PoD and FID can go as planned, then the development project of Masela can be finished in 2024. And only in that year that Abadi Field would make its firs production. 

Currently Inpex management is still waiting on government’s decision regarding the PoD final decision for Masela Block. “As we all know, the PoD revision has been recommended by the SKK Migas to the EMR Minister. Now we only wait for the approval,” Ari said.

And as Katadata had published before, the EMR Ministry is trying to find world-class independent consultant to review the PoD revision proposal for Masela Block that has been submitted by Inpex Masela and had been approved by SKK Migas on September 10^th 2015. And so, the final result regarding the PoD Masela would only be issued two months later or by the end of this year. 

But then, Inpex’s plan to build the floating refinery (FLNG) with 7.5 million metric tons per year (MTPA) and investment value of US$ 14.8 billion has triggered pro-contra between the senior officials in the government.

Rizal Ramli criticizes the FLNG development to process natural gas to become liquid natural gas (LNG) in the middle of the sea. The technology of such facility is still relatively new in this world, which will make the investment cost to be very large. And in Rizal’s version of calculation, the investment can reach US$ 19.3 billion. 

Instead of building FLNG, Rizal thinks that it will be more beneficial to build 600 kilometer pipe networks to channel the gas from Masela Block to the Aru Island in Moluccas. Besides cheaper investment, the step is more beneficial to help the development of Aru region. Besides, it will create multiplier effect towards the economic growth of Indonesia. 

Right now, Inpex is still waiting for the government’s final decision regarding the plan of development for Masela Block. But one thing for sure is that Ari promises that Masela Block project will help the government with the national energy needs in the days ahead, as well as to give a significant multiplier effect for the domestic economy. “This is in line with the Nawacita mission that the government has planned in the maritime development,” Ari added. 

Besides the pro-contra FLNG scheme, Inpex also faces another potential problem in the development of the block, which is land problem to build the Logistic Supply Base (LSB) in Saumlaki, Moluccas. “The land is still in process, following the law that is currently in effect. Right now the process is led by a team that is guided by the local government’s Governor (Moluccas),” Ari said.