Govt wants 30% of Masela gas output for domestic market

By Bambang Atmadja

The government demanded that about 30 percent of gas to be produced from the Abadi field in the Masela block in Maluku must be allocated for the domestic market.

?The domestic allocation is about 30 percent,? said Vice Minister of Energy and Mineral Resources Susilo Siswoutomo said on Monday.

Meanwhile, Deputy for Commercial Control at the upstream oil and gas authority SKK Migas, Widhyawan Prawiraatmadja also confirmed this, saying that Inpex Corp as the operator of the block must first complete heads of agreement (HoA) with both domestic and overseas buyers before the government decides on its request for a contract extension on the block.

?Our task is to demand Inpex to have HoA, both with domestic and overseas buyers. We?ll make certain that domestic will get (gas allocation from the block). The guidance from the government is for domestic (market) to obtain a minimum of 30 percent,? he said.

Japanese firm Inpex Corp, which owns 65 percent interest in the Masela block with the remainder 35 percent held by partner Shell, has proposed an extension of its contract on the block for another 20 years to ensure that it will get enough return for the huge investment it is going to spend for the Abadi field in the block. The current contract is effective from Nov. 1998 through Nov. 2028.

The Masela block is expected to produce 2.5 million tons of gas and 8,400 barrels of condensate per year, starting 2018 or 2019.

Editing by Reiner Simanjuntak