Inpex, BP projects await assessment approval

August 09:

Two gas development and expansion projects in the eastern half of the country, which are expected to boost production capacity, will soon receive approval from the government, pending assessment.

One of the projects, the development of a deepwater facility at the Abadi field in the Masela block in the Arafura Sea, which is being carried out by Inpex Masela Ltd., is still awaiting assessment from the government. 

The other project, BP Indonesia’s proposed expansion of the Tangguh liquefied natural gas (LNG) plant in Bintuni Bay, West Papua, is awaiting approval of its environmental study.

Deputy Energy and Mineral Resources Minister Susilo Siswoutomo said his office was evaluating a contract extension request for the Masela block, which would determine the continuation of the deepwater development project in the block.

“We are evaluating it [the contract extension request]. The Masela project must go ahead,” Susilo said on Tuesday.

Under a plan of development (POD) approved in 2011, Inpex is planning to build a floating LNG facility with capacity for 2.5 million tons of gas per year. The company is currently working on a front end engineering design (FEED), according to its website. 

The development of the Abadi field at the Masela block is one of biggest deepwater projects in the country with investment estimated to be around US$5 billion. The Abadi field is estimated to have 6.05 trillion cubic feet of gas in proven resources.

Inpex is trying to secure some certainty for its business from the government. According to the Upstream Oil and Gas Regulatory Task Force’s (SKKMigas) deputy planning head, Aussie Gautama, the company had sought a contract extension for the Masela block through 2048.

The current contract for the Masela block is due to expire in 2028. Inpex, according to Aussie, argued that if Masela’s Abadi gas delivery began, as planned, in 2018, the company would not be able to make the most of the gas resources, as production would only last 10 years.

The government, on the other hand, cannot easily grant contract extensions because under the law, a request for a contract extension can only be made, at the earliest, 10 years before it expires. Therefore, in the case of the Masela block, the request should be submitted no earlier that 2018.

Meanwhile, regarding the Tangguh LNG expansion plan, BP Indonesia head Dharmawan Samsu said a hearing on the project’s environmental study had been completed. The company was expecting to obtain approval in April or May, he added.

“We are also expecting to announce the winner of the FEED tender for the Tangguh expansion soon. Moreover, we are in the final stages of a discussion with [state-owned electricity firm] PT PLN about an electricity sale and purchase agreement,” Dharmawan said on Monday.

He added that the final investment decision for the Tangguh expansion should be obtained in 2015 to allow work to be completed, according to its schedule, in 2019.


Source:  m.thejakartapost.com/news/2014/03/05/inpex-bp-projects-await-assessment-approval.html?

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