Inpex proposes to triple capacity of Masela LNG plant

Japan?s Inpex Corporation, the operator of the Masela block, offshore Maluku, has proposed to triple the annual capacity of its planned floating LNG plant to 7.5 millions tons from the original plan of 2.5 million tons following the finding of new gas reserves.

Bisnis Indonesia quoted Deputy for Control and Operation at the upstream oil and gas authority SKK Migas, Muliawan as saying Friday that the new gas finds are currently being certified by Lemigas, a process expected to complete in March.

?They have requested to triple the capacity because of the finding of new reserves,? Muliawan said.

Inpex operates the Masela block with a 65 percent participating interest in partnership with Shell Upstream Overseas Services (I) Limited, a subsidiary of Royal Dutch Shell plc, which holds a 35 percent participating interest.

Both firms plan to develop a floating LNG plant to process gas from Abadi field of Masela. Muliawan said that the floating LNG plant to be built by Inpex would be the largest in the world.

He added that the Inpex project to be on stream in 2024, 60 percent of the LNG output is expected to be allocated for the domestic market.

The two firms, however, have said that the project would not be feasible unless the government extend the existing contract expiring in 2028. Inpex has made a request for contract extension, but existing regulation rules that such request can only be made 10 years before the contract expires.

The authority has previously said that it may entertain the contract extension request if Inpex has signed gas sales agreements.

Bisnis Indonesia said that to date no gas sales agreement has been signed by Inpex. The company is currently in the process of revising the plan of development, Muliawan said. (*).