Indonesia considers upping Masela output

JAKARTA, October 21, 2016 – The Indonesian government on Friday said it would consider again a request by Inpex Corporation to dramatically increase LNG output of the Abadi LNG project, which sources gas from the Masela block.

Together with leading LNG trader Shell, Inpex had proposed earlier this year to increase the planned LNG output from 2.5 million tpy to up to 9.5 million tpy by developing the world’s largest FLNG facility worth some USD 15 billion.

The Indonesian government at the time rejected the proposal, insisting on an onshore facility that it claimed would be more beneficial for local development. But now, days after the inauguration of new Indonesian Energy Minister Ignasius Jonan, officials told journalists that they would make up their minds in “one or two weeks.”

“We are still discussing the capacity of Masela – between 7.5 mtpa [million tpy] and 9.5 mtpa,” Co-ordinating Maritime Minister Luhut Pandjaitan told Reuters.

Masela was originally expected to start producing LNG in 2018, but that is likely to be pushed back into the 2020s.

Indonesia has accelerated its oil and gas exploration drive in recent weeks, with a recent discovery of at least 300 million boe in the offshore Pangkah block in the East Java province and the government announcing on September 22 that it planned to remove exploration taxes.

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