Inpex Masela Ltd, the operator of the Abadi Masela gas field project, held the ceremonial kick-off of the LNG Abadi Masela Project Management Team (PMT) on December 28, 2023.
Head of the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), Dwi Soetjipto, described the event as a new milestone for the project that has been on the table since the early 2000s.
“Today is special because we are conducting a ceremonial kick-off that marks the restart of the national strategic project Masela, which has an investment value of US$ 20.9 billion,” said Dwi on Thursday.
When converted to Indonesian rupiah, the project has an investment value of IDR 324 trillion, nearly three times larger than the Jakarta-Bandung high-speed train project (Whoosh). The project is expected to generate revenue of US$ 37.8 billion or IDR 586 trillion for the government.
The Abadi Masela gas field has been a National Strategic Project (PSN) since September 2017. The Masela Block is estimated to produce 9.5 million tons of LNG per year, with pipeline gas reaching 150 million standard cubic feet per day (MMscfd) and 35 thousand barrels of condensate per day (bcpd).
Acting Executive Director of Inpex Masela Jakarta, Henry Banjarnahor, mentioned several activities planned throughout 2024. This includes land acquisition for non-forest areas and the completion of environmental impact analysis (AMDAL) approvals, which began in 2023.
In 2024, front-end engineering design (FEED) or tendering and commencement will be carried out. These plans for 2024 are a follow-up to the achievements in 2023.
The second revision of the Masela Block Plan of Development (POD) was approved by the Minister of Energy and Mineral Resources, Arifin Tasrif, last November.
“The main coverage is the approval of CCS (Carbon Capture Storage) last November,” explained Dwi.
The CCS in this project has a capacity of up to 1.2 gigatons with a CO2 injection capability of 71-80 million tons. According to Dwi, the presence of CCS signifies a commitment and contribution to the upstream oil and gas industry in reducing carbon emissions and supporting the government in achieving the target of net-zero emissions by 2060.
The Abadi Masela field project is targeted to be onstream in the fourth quarter of 2029, with the first LNG cargo delivery expected in the first quarter of 2030.
“If this project can be completed faster, it can increase state revenue and support domestic gas needs,” Dwi said.
The Masela Project is showing more progress with the formation of a new consortium managing the block. In addition to Inpex, Pertamina Hulu Energi Masela and Petronas are also participating in the Abadi gas field.
Akihiro Watanabe, Senior Vice President Asia Project Inpex, welcomed the Masela Project ceremonial kick-off. “This event is very important as an opportunity to ensure and align with SKK Migas to accelerate the Abadi Project,” said Akihiro.
Akihiro stated a strong commitment to making the Abadi Masela Project the first LNG project with CCS in it.
Potential losses of trillions of rupiah if Abadi Masela Project faces delays
Dwi Soetjipto warns of potential losses that could occur if the Abadi Masela Project experiences production delays.
“We need to be aware that in case of a delay, the financial loss, in terms of revenue, would be around US$ 5 billion or IDR 77 trillion per year,” he said on Thursday.
In addition to revenue, Dwi mentioned that from the capital expenditure (capex) perspective, if the project is delayed, it will lead to additional costs of approximately US$ 1 billion per year. Thus, the total loss could reach IDR 90 trillion per year.
To mitigate the significant potential setback, Dwi emphasized the need to kick off the project by conducting a potential analysis.
“Almost all oil and gas projects experience delays. We hope to speed up the process to avoid losses,” he stated.
