Government turns down two of five Inpex?s requests in Masela project
Tuesday, December 6 2016 - 01:51 AM WIB
Petromindo
The Ministry of Energy and Mineral Resources has turned down two of five incentives requested by Inpex Corp, the operator of the Masela block, to help improve the economic feasibility of the Abadi field gas project in the block, Kontan reported on Tuesday.
The paper quoted Deputy Minister of Energy and Mineral Resources Arcandra Tahar as saying that the ministry and the Office of the Coordinating Minister of Maritime Affairs have rejected a request made by Inpex for a 10-year moratorium of the current contract over the block.
Arcandra said that the government would provide the moratorium but not for 10 years as requested. He declined to say for how long. ?What?s clear, we?re evaluating (the request) based on reasonable calculation,? he said.
Inpex requested the incentives to make the giant Abadi gas project in Maluku Province commercially feasible after President Joko Widodo in March of this year changed the production technology to be used in the project to onshore LNG production facility from floating LNG facility as set under the previous plan of development.
Inpex demanded for a 10-year moratorium of its contract over the block, a period it spent to develop the floating production facility, which if approves would effectively extend the contract to 2038 from the current 2028.
Meanwhile, Coordinating Minister of Maritime Affairs Luhut Panjaitan said the government has also rejected a request by Inpex to expand the production capacity of the project to 9.5 million tons per annum (mtpa). He said that LNG plant capacity will be maintained at 7.5 mtpa.
Inpex has also requested for expenses it spent in developing the offshore technology estimated at US$1.6 billion to be covered by the government through the cost recovery mechanism. Arcandra said that the government is still making the necessary calculation, but quickly added it won?t be that much.
Other incentives requested by Inpex includes a minimum internal rate of return of 15 percent and acceleration of permitting process.
Senior Communications Manager at Inpex Usman Slamet said the company is still continuing talks with the government to seek ways so that the Abadi gas project can be immediately developed. (*)