Bahlil Reveals the Government Had Warned Inpex about the Masela Project

TANIMBAR - The government had sent a warning letter to Inpex before the Abadi Masela LNG Project finally entered the construction phase. This step was taken because the gas project had been stalled for a long time even though its development plan had been approved.

Minister of Energy and Mineral Resources Bahlil Lahadalia revealed this when giving a speech at the laying of the first stone of the National Strategic Project of the Abadi Masela LNG in the Tanimbar Islands Regency, Maluku, Thursday, July 16.

Inpex is a Japanese oil and gas company that is the operator of the Masela Abadi LNG Project.

According to Bahlil, the project which started in 1998 has passed through the six presidencies. Its implementation has dragged on due to long debates regarding the construction of gas processing facilities at sea or on land.

"This project has been hanging around for a long time. The debate is between the sea or on land and this is a very long debate," said Bahlil.

He said President Prabowo Subianto then asked the Ministry of Energy and Mineral Resources to accelerate oil and gas projects whose development plans had been completed, but had not yet been carried out.

The government, said Bahlil, gave a confirmation to the concession and licensing holders to immediately execute the project. The first warning letter was then sent to Inpex.

"On that basis, we sent the first warning letter to Inpex and thank God today we have done the groundbreaking for the next development," he said.

Initial work includes the development of 11 wells and four follow-up wells. A number of supporting facilities, including ports and docks, have also begun to be built.

The investment value of the project is estimated at US$ 20.95 billion or almost Rp. 390 trillion. The project is targeted to produce 9.5 million tons of LNG per year and about 35,000 barrels of condensate per day.

Bahlil said at least 60 percent of the gas would be allocated for domestic needs. The rest, a maximum of 40 percent, can be exported.

Gas for the domestic market will be used, among others, for the fertilizer industry, PLN, PGN, and a number of private companies to encourage downstream activities.

This project is also expected to absorb around 12,000 direct workers during the construction period. When operating, the labor demand is projected to reach 800 to 1,000 people.