The development of a long-stalled, nationally strategic gas project in the offshore Masela Block has taken a step forward as the Maluku governor has allocated 27 hectares of land for the project’s harbor.
Maluku Governor Murad Ismail issued on Feb. 14 letter No. 96/2020, which allocated a small plot of land on Nustual Island for the development of the harbor to be used to move items related to the establishment of the Abadi Liquefied Natural Gas (LNG) plant in the Masela Block. In a follow-up announcement received by The Jakarta Post on Sunday, the provincial administration said that acquiring the land – parts of which are currently owned by two different individuals –would take about eight months.
The policeman-turned-governor previously gave the plant’s operator, Japanese oil company Inpex Corp, a recommendation for between 900 Ha and 1,000 Ha of land on a separate island to develop the plant itself.
“We’re continuing to hold discussions related to land acquisition and preparing local workforces,” said Murad in a statement last week on March 9, adding that the plant was expected to begin construction in 2021.
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Abadi is one of two LNG facilities being developed in Indonesia. The other facility is British Petroleum"s (BP) Tangguh Train 3 plant in West Papua. The two facilities, once operational, are expected to double Indonesia’s LNG production capacity to 33.1 million tons each year to increase its global exports of the commodity.
The Upstream Oil and Gas Special Regulatory Taskforce (SKK Migas), which spearheads the government’s efforts on upstream gas-related matters, expects higher LNG exports to help offset Indonesia’s growing oil imports, which are a main contributor to the country’s trade deficit.
Oil and gas imports reached US$1.75 billion in February, up 10.7 percent from the same month last year, Statistics Indonesia (BPS) data shows.
Despite being listed as a nationally strategic project, the Abadi LNG plant’s development has been delayed for 18 years due to a disagreement between Inpex and Indonesia over the block’s development plan, including whether the LNG plant would be built onshore or offshore.
Locals have also resisted the project. The Maluku People’s Forum (Formama) told reporters in Jakarta in December of last year that members were unsatisfied with the project’s contribution to local residents’ welfare, as reported by Tribunnews.com.
Contrary to Murad’s expectations, Japan’s Inpex expects to begin plant construction in early 2023 and have the facility operational by 2027, when it expects to produce 9.5 million metric tons of LNG per annum (mtpa).
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Inpex Masela corporate communications manager Ujar Moch N Kurniawan said the company would continually engage stakeholders to ensure “we can execute the Abadi LNG project as per the plan of development agreed upon with the Indonesian government”.
SKK Migas deputy of operations Julius Wiratno added in a statement on Monday that developers were facing a slight delay due to the novel coronavirus epidemic. They had to clean survey equipment to ensure employees were not affected by the virus.
“We need about a month to disinfect survey equipment, particularly the equipment that comes from countries infected by COVID-19,” he said.
Julius added that Inpex was currently working on the Front-End Engineering Design (FEED) and Engineering, Procurement and Construction (EPC) plans for the project.