UPDATE: Jokowi decides Masela LNG must be onshore
Wednesday, March 23 2016 - 07:06 AM WIB
President Joko Widodo also known as Jokowi has decided that the LNG plant planned to process the gas from the Abadi field in Masela block in Maluku province must be built onshore, thus rejecting the floating LNG (FLNG) option proposed by the contractors of the block.
According to Jokowi, an onshore LNG plant will cause greater impacts on the public.
?After a lot of considerations and (having received) inputs and based on my own calculations, I decides (the LNG plant) must be built onshore,? Jokowi was quoted as saying on Wednesday in a press conference at the Soepadio airport in Pontianak, West Kalimantan. The President is on a working visit to the province.
Jokowi said he decided to choose an onshore LNG plant so that the project can generate significant benefits for the national economy and the people living near the project.
?I want the Masela project to create great impact on the national economy as well as the regional economy. This is a long term projects involving hundreds of trillions of rupiah,? he said.
"I instruct the minister of energy and mineral resources and SKK Migas to follow up this decision,? he added.
Minister of Energy and Mineral Resources Sudirman Said expressed happiness that the President has finally made a decision on the Masaela project.
?We have given all explanations and inputs (regarding the project). It is up to the President to decide. To follow up the decision by the President, I will ask the investors (the contractors of the Masela block) to review all their plans,? Sudirman said, adding he will notified the investors through an official letter.
Sudirman noted that the development of the project will be postponed since the contractors have to review all their plans for the project.
The contractors of the project --- Inpex Corp. (65 percent) and Shell (35 percent) ? proposed to build an FLNG plant at Masela on the grounds that it is cheaper to build compared to an onshore LNG plant. The proposal was supported by SKK Migas and Sudirman. However, some ministers ? namely Coordinating Minister of Maritime Affairs Rizal Ramli and Coordinating Minister of Politics, Law and Security ? are opposed to the FLNG option. They insisted that the LNG plant should be built onshore in order to generate greater benefits for the national and regional economy.
Editing by Johannes Simbolon