The Ministry of Energy of Indonesia has approved the revised development plant for the Masela LNG project proposed by Inpex. As agreed in June 2019, the project includes developing the Abadi gas field in the Masela gas block off the Maluku coast and building a 9.5 Mt/year onshore gas liquefaction plant, gas pipelines and offshore facilities. Inpex is now expected to make a final investment decision (FID) on the project, which could start operation in 2027.
The Masela block is located in the Timor Sea near Indonesia’s border with northern Australia and is owned by Inpex (65%) and Shell (35%). Inpex acquired a 100% interest in the Masela Block in 1998 through an open bid conducted by the Indonesian government. In 2017, the initial Masela Block Production Sharing Contract (PSC) - due to expire in 2028 - was extended for another 27 years, i.e. until 2055. In 2010, Indonesia approved an initial floating LNG (FLNG) plan with an annual capacity of 2.5 Mt/year, which was raised to 7.5 Mt/year in 2015. However, in 2016, the Indonesian government rejected the initial US$15bn FLNG plan, saying an onshore plant would be US$6bn cheaper and more beneficial for the local economy. The authorities instructed Inpex to re-propose a plan of development based on onshore LNG instead, delaying the anticipated start of production from the field until the late 2020s.
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