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Indonesia hints at extending Masela block contract, PoD to be submitted soon

JAKARTA (RambuEnergy.com) – The Indonesian Energy and Mineral Resources Ministry has hinted of extending the contract of Inpex Corporation in developing the Abadi Field within Masela Block in the Arafura Sea, which will expire in 2028.

The move will be in line with planned approval of the Plan of Development (PoD) of the Masela Block. Inpex has said recently that it will soon submit the PoD of the Abadi Field.

“Inpex has promised to submit the PoD next month,” said Director General for Oil and Gas at the energy ministry Djoko Siswanto.

The development of Masela Block has been delayed after the Joko Widodo government instructed Inpex to build onshore LNG plant, instead of offshore LNG plant in the form of floating LNG (FLNG).

The decision has prompted Inpex to re-submit the PoD of the block development.

Inpex has earlier demanded an extension of the contract before the company allocated huge investment for the project given the limited time for recovering its investment.

Under the current ruling, operators can submit a request for extension 10 years before the contract expires. The government may extend the contract by 20 years.

“In principle, we are okay (agree with the extension),” Siswanto said Monday.

At present the ministry, in this case, the Special Task Force for Upstream Oil and Gas (SKK Migas) is evaluating the Pre-Front End Engineering Design (Pre-FEED) of the Abadi Field in Masela Block. Once Pre-FEED is approved, the operator can move ahead with PoD.

Earlier, KBR, Inc (NYSE:KBR), a global EPC company has been awarded a pre-FEED contract by INPEX Corporation through its subsidiary INPEX Masela Ltd for the Abadi onshore LNG Project in the Arafura Sea in Indonesia.

Under the terms of the contract, KBR will provide a cost competitive, pre-FEED package utilizing its well proven design and execution methodologies. The pre-FEED will be performed entirely from KBR’s Jakarta office in Indonesia, KBR said in a statement.

Under the deal, KBR will provide services including site master plan development, the scope of work for the FEED phase as well as an EPC schedule and cost estimate.

Abadi LNG project, Masela Block is operated by INPEX Masela under the supervision of The Indonesia Government Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas).

KBR is a global provider of differentiated professional services and technologies across the asset and program life cycle within the Government Services and Hydrocarbons sectors. KBR currently employs approximately 34,000 people worldwide (including our joint ventures), with customers in more than 75 countries, and operations in 40 countries, across three synergistic global businesses. (*)

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