Govt asks Inpex to build onshore LNG plant

Indonesian government asks Inpex Corporation to build onshore LNG plant for Masela block in Timor Island instead to accelerate the long-delayed project.

Energy Minister Purnomo Yusgiantoro admitted government allows Inpex to build floating LNG plant when the provisional plan of development (PoD) was awarded. "But there are new developments, where the oceanic trenches were initially considered as deep as 2,500 meter, but turned out to be shallow enough to lay down the pipeline," Purnomo said.

He was optimistic an onshore LNG plant would save billions of USD of investment. Other than that, according to Purnomo, construction of the LNG plant could be accelerated to 2013-2014, two years ahead of the schedule for floating facility (2015-2016).

Evita Legowo, director general for oil and gas at the ministry said a feasibility study for the pipeline is expected to accomplish in the coming months.

Inpex Masela Ltd won an open bid for and acquired a 100% working interest in Masela Block in November 1998. The Japanese company then discovered the Abadi gas field in 2000, the first hydrocarbon discovery in Indonesian Arafura Sea. The company submitted POD to Indonesian government last September for a floating LNG concept to produce 4.5 million tons of LNG per year for more than 30 years. FEED was expected to start by the end of this year, to be followed by FID in 2011.

Inpex is one of the largest players in Indonesia's oil and gas business. The company owns 50% working interest in Offshore Mahakam block which supplies Bontang LNG plant in cooperation with Total, and the Attaka Unit (50%), in cooperation with Chevron (50%). 

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