Govt approves of Masela LNG terminal POD

The government has approved of the plan of development (PoD) for an floating LNG terminal to process gas from the Masela block in Timor Sea.

?I signed it two days ago,? Minister of Energy and Mineral Resources Darwin Z. Saleh said on Thursday.

Separately, Evita Legowo, the ministry?s director general of oil and gas, said the floating LNG terminal will be built with a capacity of 2.5 million tons per annum (MTPA), rather than the initial plan of 4.5 MTPA.

?Based on inputs from independent team, with a capacity of 4.5 MTPA, the facilities will be too big. A 2.5 MTPA capacity is more economical,? Evita said.

She also said the owner of the project is given option of increasing the capacity by 2 MTPA in the future. ?Still in the first phase, the capacity is set at 2.5 MTPA.?

The Masela block used to be wholly owned by Japanese firm Inpex Corp. Energy Mega Persada, a subsidiary of the Bakrie Group, recently bought a 10 percent interest in the block, cutting Inpex?s interest to 90 percent.

According to Evita, the government wants that the floating LNG terminal can start operation in 2016, one or two years earlier that the schedule proposed by Inpex and partner.

PT Maluku Energi, a company owned by the Maluku provincial administration, is reportedly seeking to acquire a 10 percent stake in Masela block, citing that the LNG facilities will be built 12 miles off the nearest island of the province.

?We shall not interfere with the negotiation as it is a business-to-business negotiation,? she said.

Following the approval of the PoD, Inpex is required to work on WP&B and AFE before holding an EPC tender, she added. (Bernard)