Japanese energy group Inpex is considering expanding the production capacity of its Masela gas field in eastern Indonesia, proposing to raise the capacity of the LNG project to up to 9.5 Mt/year; the liquefaction project, developed by Inpex (65%) and Shell (35%), was initially expected to produce 2.5 Mt/year and was later raised to 7.5 Mt/year.
In March 2016, the Indonesian president rejected plans to develop a US$15bn floating LNG (FLNG) project to process gas from the Masela field, considering that an onshore facility would be US$6bn cheaper than an FLNG and preferring the project to be built onshore. Energy regulator SKK Migas backed Inpex's calculations, considering than an onshore LNG plant would cost US$4.5bn more than an FLNG. Consequently, Inpex decided to postpone the final investment decision by two years, from 2018 to 2020. An onshore LNG plant on the islands of Aru or Saumlaki in under consideration. The anticipated start of production is not expected before the late 2020s.