Here are three Indonesian-Japanese agreements on the Masela Block

News24xx.com - JAKARTA - Indonesia has reached three agreements with Japan following a recent visit by the country's Energy Minister Ignasius Jonan to Japan to discuss the Masela Block gas field development project.

The agreements were made after Minister Jonan met with Japan's Inpex Corp. CEO Toshiaki Kitamura in Tokyo on Tuesday, according to a press release from the Ministry of Energy received here on Thursday.

The three agreements include the government's stance to urge Inpex to develop the LNG refinery project onshore in line with President Joko Widodo's directive.

Secondly, the government will extend Inpex's contract for 20 years and add seven more years to compensate for changing the project from offshore to onshore.

Thirdly, the Indonesian government will offer Inpex the freedom to determine the location of the refinery project.

"The decision to extend the contract with Inpex to 20 years was made, as the current contract will expire soon. The seven additional years have been given to compensate for changing the scheme from offshore to onshore project," Minister Jonan said after meeting with Kitamura, reported antara.

Currently, Inpex is conducting a "pre-front end engineering design" (pre-FEED) of Masela after receiving a work order from SKK Migas, the oil and gas regulatory agency.

Following Minister Jonan's visit on May 16, 2017, a pre-FEED agreement was reached with an option of production capacity and an island.

Based on the order, it was stated that the capacity of the LNG refinery was set at 9.5 million tons per year and gas pipe production at 150 million cubic feet per day.

Pre-FEED is an important stage for formulating a revision of the Plan of Development (PoD).

The revision of PoD is being conducted to increase the LNG production capacity when the project is still to be carried out offshore.

The Masela Block contract, signed in 1998, is managed by Inpex, as the operator, with a 65 percent stake, and Shell Upstream Overseas Services, with a 35 percent stake.

The Indonesian government is optimistic that Inpex would immediately start the development project.*

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