Luhut: Inpex, Shell agree to cut Masela investment costs to $15b

By Febry silaban

Interim Minister of Energy and Mineral Resources Luhut B. Panjaitan, who is also Coordinating Minister of Maritime Affairs, said Inpex Corp and Royal Dutch Shell, the owners of Masela block in Maluku province, have agreed to cut investment costs for the block?s LNG project from US$22 billion to $15 billion.

He said the revised investment costs that have been accepted both firms were proposed by former Minister of Energy and Mineral Resources Arcandra Tahar, who was dismissed this week due to dual citizenship issue.

Luhut said the revised investment costs were purely a decision by Arcandra, who is affectionately called Candra. He came to the number after asking both firms about their financial capability.

?The figures were recalculated by him along with the two companies. The change did not come from Pak Candra. Pak Candra asked them about the cost structure. They presented the figures, which were then corrected by Pak Candra. They accepted the correction. Thus came the $15 billion figures,? he said.

He said the investment costs are likely to be further revised downward. ?There are too many figures which I see too high for the moment,? he said.

The LNG plant that will be built for the block will be built onshore, rather than offshore as proposed by both investors. The main reason both investors proposed to build the LNG plant offshore is because an floating LNG plant is considered cheaper than an onshore LNG plant.

Editing by Johannes Simbolon