Inpex may cooperate with Woodside to develop Masela LNG plant

Japanese firm Inpex Corp. and Australian firm Woodside Petroleum may cooperate to develop a floating LNG plant in Masela block in Timor Sea, a senior official of upstream oil ands gas regulatory body BPMIGAS has said.

"Woodside has reportedly found gas in Timor Leste's territory of Timor Sea, but it can't send the gas through pipelines. Thus why not cooperating to build a floating LNG plant," BPMIGAS's Planning Division Head Handoyo.

A cooperation between both companies would speed up the development of Masela's gas, he said, adding an estimated US$3.5 and $4 billion is needed to build the floating LNG plant.

Earlier, a Petromindo.Com source who declined to be identified said that companies like Royal Dutch/Shell, Total SA, Marathon Oil, StatOil and ConocoPillips had expressed interest to farm in the block in order to participate in the development of the floating LNG plant.

The source, however, said that it?s too early to tell which of the companies Inpex would favor.

The source said Inpex would submit Plan of Development (PoD) for the block in May and certify the reserves later this year. The source estimated that front-end engineering design would be completed in 3 years, and engineering, procurement and construction (EPC) process three years, which may bring the LNG plant to start production in 2014-15.

Inpex may have to build a floating LNG plant in the block, as the nearest Indonesian land in 800 kilometers away and the idea to pipe the gas to LNG plant in Darwin, Australia, 400 kilometers away would likely be turned down by the Indonesian government.

State oil and gas company Pertamina has expressed interest to acquire a 10 percent interest in Masela under the Indonesian participation regulation which allows it to acquire up to 10 percent interest in one block after first PoD is approved.

The Masela Block is located offshore southwest of Tanimbar Island, about 800 kilometers east of Kupang and approximately 400 kilometers north of Darwin, Australia. Inpex operates the block with 100 percent working interest.

Gas reserves at Masela are estimated to be around 4-7 TCF, which could warrant for development of an LNG plant. (godang)