Jokowi: FID for Masela to be made in 2018
Monday, February 29 2016 - 07:11 AM WIB
President Joko Widodo said on Monday that the Final Investment Decision (FID) for the Masela block will be made in 2018. There is still much time left for the owners of the block to devise plan of development for the block.
?This is a big and long term project. The study is still in progress and the investment decision will be made in 2018. As such, we need time to provide opportunities for investors (the owners of the block to decide whether to build LNG facilities) offshore or onshore. It should be finalized as soon as possible,? the President told reporters after witnessing the signing of 2016 Strategic Project Contracts at the Ministry of Energy and Mineral Resources (MEMR) on Monday.
He underlined that the most important thing is that the project should provide benefits for the development of eastern Indonesia, adding that he had assigned MEMR and the National Development Planning Board (Bappenas) to design plans on how eastern Indonesia will benefit from the project.
The main issue regarding Masela block is whether the LNG plant that will developed to process the gas from the block should be built onshore or offshore. Some ministers favor onshore LNG plant, while the owners of the block ? Inpex Corp and Royal Dutch Shell ?, supported by the MEMR minister, favor offshore LNG plant
The President?s statement did not seem to be very clear regarding that issue that Minister of Energy Mineral Resources Sudirman Said talked to reporters to clarify what the President meant with his statement.
?I want to clarify (what the President meant). He said the FID will be made at end-2018. What he was asking for is plan of development. Since this is a big and long term project, he wanted all inputs to be evaluated before a decision is made. However, the PoD must be decided now,? he said.
Sudirman noted that according to a study carried out by several parties, including industrial players, SKK Migas and universities, the LNG project, if built offshore, will be able to earmark Rp 5 trillion in funds per year in funds that can be used to develop southern Maluku in particular and Maluku province in general.
?Rp 5 trillion is a huge amount of money. The issue now is, How to create a special authority to manage the funds for the purpose of accelerating (the economic development of) the region. The President referred to Bintulu (LNG plant) in Malaysia as an example,? he said.
Sudirman said the development of the project is expected to start in 2019 and will be completed in 2024.
Editing by Johannes Simbolon