Inpex agrees to start pre-FEED for Masela block project

Toshiaki Kitamura, CEO and President of Inpex Corp, operator of the Masela block, said his company is ready to quickly start the pre-Front End Engineering Design (pre-FEED) for the planned Abadi gas development project in the block as requested by the Indonesian Ministry of Energy and Mineral Resources.

Kitamura said in a statement issued by the ministry on Tuesday, following a meeting with Minister of Energy and Mineral Resources Ignasius Jonan at the end of this three-day visit to Japan, that for this purpose the company agrees to soon hold a workshop with the Indonesian upstream oil and gas authority SKK Migas to discuss strategic points prior to starting the pre-FEED.

SKK Migas Deputy Chairman, MI Zikrullah, who attended the Tuesday meeting, said that the authority is ready to start workshop with Inpex soon.

Kitamura made the promise after Jonan reiterated the government?s demand for the Japanese firm to quickly start the pre-FEED for the gas-rich Abadi field to get rolling as it has long been planned and discussions between the government and the company have been quite lengthy.

Jonan was in a Japan meeting top officials of Japanese firms including Japan Bank for International Cooperation (JBIC) CEO Tadashi Maeda, Itochu Corp Vice Chairman Yoichi Kobayashi, President & CEO of Mitsubishi Corp Takehiko Kakiuchi, Tokyo Gas CEO Michiaki Hirose, and former Japanese Prime Minister Yosuo Fukada.

As has been previously reported, the minister has demanded Inpex to quickly start making pre-FEED documents for two onshore LNG plant scenarios in two locations. The first is an LNG plant with capacity of 7.5 million tons per annum plus pipeline gas of 474 mmscfd, and the second with capacity of 9.5 mtpa plus pipeline gas of 150 mmscfd. There are also two alternative locations for the project: Aru Island or Yamdena Island, in Maluku Province.

Jonan explained that with the pre-FEED document completed, the government will be able to among others decide allocation of gas from the project, the capacity of the LNG plant, and its location. The document will also be used as basis for the investors in developing the project.

President Joko Widodo decided in March for Inpex to develop onshore LNG facility at the Masela block project in Maluku, despite an earlier proposal from the company and partner Shell to build an offshore facility. Inpex has demanded a number of incentives for the government to make the onshore project commercially feasible including increasing the LNG production facility to 9.5 mtpa.

Editing by Reiner Simanjuntak