Rizal Ramli: Government selects OLNG for Masela block

Coordinating Minister for Maritime Affairs Rizal Ramli claimed that the government has decided to use onshore LNG (OLNG) production facility in the planned development of the gas-rich Abadi field in Masela block, Maluku, as it would provide greater multiplier effect and help accelerate economic development of Maluku.

?The decision has been made carefully after through discussions, taking into consideration inputs from various parties,? Rizal said in a statement issued on Monday.

The statement comes ahead of a planned cabinet meeting reportedly to decide on which technology, OLNG or its counterpart floating LNG facility (FLNG), to be used in the planned development of Masela block.

Meanwhile, Presidential Spokesman Johan Budi said on Tuesday that President Joko Widodo has not made any decision yet regarding the Masela block project, reiterating the president needs to take into account various aspects considering the huge size and complexity of the project.

Masela block investors Inpex Corp and Shell submitted last year a revised plan of development (POD) for the project to the Minister of Energy and Mineral Resources, Sudirman Said, under which the block would be developed using the FLNG technology. The upstream oil and gas authority SKK Migas also made similar recommendation.

Minister Sudirman was supposed to approve the POD and the proposed FLNG in October, but decision has been postponed following objection from Rizal, who insisted that OLNG was a better option.

The government then decided to get an opinion from an independent consultant, Poten & Partners, which then recommended the use of FLNG. But President Joko Widodo continued to postpone the decision amid prolonged debate between FLNG and OLNG.

Sources said that a limited cabinet meeting, to be chaired by the President, is scheduled for next week to make final decision on the Masela block project.

Editing by Reiner Simanjuntak