EIA Completion of the Abadi Abadi LNG Project begins

After being stopped due to the approval of the Covid-19 pandemic, the process of discussing the Impact of the Environmental Impact (EIA) of the Abadi LNG Project, the Masela Block will start again in the second semester. Not only that, some foreign gas buyers who are interested in taking liquefied natural gas (LNG) produced by this project.

Dwi Soetjipto

SKK Migas Head Dwi Soetjipto said that Inpex Corporation and Shell continue to work on the Abadi LNG Project. At present, EIA approval for this project has been approved. Needed, Inpex as an operator will continue to be completed by Amdal so other processes can be carried out, including land acquisition.

"Inpex can conduct a survey in the second semester, especially for rainy season data. Then [the process] gives an EIA, then other things can be processed. This is a condition for the investor in the execution of the land, which is the EIA, okay, "he said.

The Abadi LNG project

Related to land acquisition, the Governor of Maluku. Murad Ismail is committed to facilitating it. The Abadi LNG project is a large project that submitted its development plan which was witnessed directly by President Joko Widodo so that the local government will support this project. In addition, this project is also intended for the people of Maluku.

"Since all land permits above 5 hectares are ours, I will help and discuss with the regents of Tanimbar and Southwest Maluku," he said.

He decided, his party would strive so that there were no challenges in the acquisition of this land. For example, it has previously provided 27 hectares of land on Nustual Island as the port side of the Abadi LNG Project. 

    The decision was stipulated in the Maluku Governor's Decree No. 96 of 2020 on the 14th of February 2020. Therefore, Murad asked the contractor not to doubt the tolerance of the local government regarding the Abadi LNG Project. Even if there is compensation for land acquisition, it will facilitate so that the amount is not excessive.

"We support that everywhere, we choose adat and deliberation. We will be picky about this land, "he said.

However, to complete the execution of land acquisition depends on Inpex.

"Procurement of land depends on Inpex wanting to be finished anytime. We just wait. It is impossible to finish if there is no support from Inpex, "he added.

Based on SKK Migas data, as of last March, the work on the Environmental Analysis (Amdal) of the Abadi Project has only reached 43.41% of the target of 47.27%. In addition, the auction process for the work of Front End Engineering Design / FEED onshore liquefied natural gas / LNG refinery facilities, floating production and loading and unloading facilities (floating production, storage, and unloading / FPSO), gas pipelines, and umbilical underwater facilities, risers, and flowline (SURF) is still ongoing.

Aside from land, Dwi admitted, the Covid-19 pandemic also considered the sale of LNG from the Abadi LNG Project. Because, for the project to reach a Final Investment Decree / FID, amounting to 80% of the total LNG production target of 9.5 million tons per year, there must be a buyer. So far, PT PLN (Persero) has approved the purchase of LNG of 2-3 million tons per year and PT Pupuk Indonesia (Persero) 150 million standard cubic feet per day / MMscfd.

"From abroad, there are Japanese, Chinese, and Taiwanese companies that are interested in buying, we immediately receive support," Dwi said.

It was revealed, his side was still hoping that the Abadi LNG Project FID could be accepted in 2022. Before that, along with LNG marketing, the project design work had to be completed.

"From 2022 to 2027, EPC (engineering, procurement, and construction) can continue," he said.

The Abadi Project launches in the second quarter of 2027. The US $ 19.8 billion replacement project undertaken by Inpex Masela Ltd is projected to produce 150 mmscfd of gas piped and in the form of LNG 9.5 million tons per year.

Investor Daily, Page-10, Wednesday, August 5, 2020

Masela LNG Project Hampered by Land Problems

The Masela Block liquefied natural gas (LNG) refinery project in the Tanimbar Islands, Maluku, faces a winding road. After Royal Dutch Shell will leave the Masela Block, the problem now arises from the unfinished refinery holding.

Referring to the notes of the Special Task Force for Upstream Oil and Gas Activities (SKK Migas) until June 2020, the available land is still partial. Even though this project is targeted to operate or onstream by 2027.

    The problem of the Contribution is potentially more complicated. Because reportedly, the Sinar Mas Group is said to have bought a portion of land in the village of Lermatang, South Tanimbar, Tanimbar Islands, Maluku Province. Its location is in the Weminak River area, the border between Lermatang Village and Bomaki Village.

Even though Maluku Governor Murad Ismail in early June this year submitted the Governor's Decree regarding the determination of the allocation of the Masela liquefied natural gas refinery port on Nustual Island, Lermatang Village, South Tanimbar, to the Head of SKK Migas Dwi Soetjipto. In the Maluku Provincial Government Decree, the allocation is 27 hectares (ha). The land in that location is said to have been bought by the Sinar Mas Group.

"I have got a report. But because the large-scale land acquisition is handled by Jakarta, we submit this problem to Jakarta (SKK Migas). " Rinto Pudyantoro, Chief Representative of SKK Migas Papua Maluku.

But Rinto was reluctant to mention on behalf of what company and what price of land purchased by the Sinar Mas Group. Rinto only stated that, in principle, the Masela Blok LNG refinery project was a state project, so the land was bought and acquired on behalf of the Minister of Finance and became the property of the state. Likewise, private property to be purchased.

Gandi Sulistiyanto

The Managing Director of the Sinar Mas Group, Gandi Sulistiyanto, denied that he had bought or even owned land in the area.

"I have checked with the forestry and mining unit, there is no land in the area. Where's the news from? Which regency and province? "He said.

Acting Head of the SKK Migas Program and Communication Division, Susana Kurniasih, said that the Sinar Mas Group did not coordinate with SKK Migas.

"If it is true that Sinar Mas will be active in Lermatang Village, we hope that the activities will not interfere with the Masela project plan," he said.

    Moreover, the Tanimbar District Head, Maluku Governor and the Minister of Environment and Forestry (LHK) have agreed on the needs of the LNG refinery allocation. Head of SKK Migas. Dwi Soetjipto emphasized that the Masela onshore LNG Plant project should not be disrupted. The Central Government and regional governments have committed to that, "he said.

Inpex Corporation

    Regarding the prospective LNG Plant location, the management of Inpex Corporation stated that it always refers to the Decree of the Maluku Governor. The exact location and area of ​​the Abadi LNG refinery will be finalized after the results of the survey and design study have been studied, "said MN Kurniawan. Act Corporate Communication Manager Inpex Masela.

Kontan, Page-1, Monday, July 27, 2020

There is a Divestment Issue, the Masela Block Project Continues to Scroll

During the process of discussing the divestment of Royal Dutch Shell's participation rights in the Masela Block, a number of works related to infrastructure projects in the block are said to continue. 

the Masela Block

     Secretary of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Murdo Gantoro said, there were a number of stages in progress.

"At the moment there are field preparations related to studies to complete the Environmental Impact Analysis, prepare a final investment decision and land acquisition," he said.

Even so, Murdo did not want to specify whether the divestment discussion process would make sense to disrupt the course of the activity. SKK Migas also cannot comment further regarding the latest developments from discussions between Shell and Inpex Corporation as the operator of the Masela Block.

Inpex Corporation

 Maluku Governor Murad Ismail has submitted a Governor Decree concerning the determination of the location of Masela's liquefied natural gas refinery port to the Head of SKK Migas. The location is on Nustual Island, Lermatang Village, South Tanimbar, Tanimbar Islands, Maluku Province.

SKK Migas Deputy for Operations Julius Wiratno said, the area of ​​the transferred land had indeed reached some of the needs.

"There are still many more, for example to build LNG refineries, he said.

The location is determined to be approximately 27 hectares.

Kontan, Page-13, Wednesday, July 22, 2020

Looking for a Substitute Shell in the Masela Block

The desire of Royal Dutch Shell to flee from the Masela Block was so serious. Research institute Rystad Energy has even released research, Shell is eyeing funds of up to the US $ 2.2 billion from the sale of 35% of participating interest in participating in the Abadi Gas Field.

the Abadi Gas Field

Rystad Energy Readul Islam analyst said, even in good economic conditions, it is very difficult to predict the parties who are interested in buying Shell's participating shares in the Masela Block. 

     From its origin, global oil and gas players are likely to have shopped for current liquefied natural gas (LNG) exposures. He even considered Inpex Corporation could involve the Japanese government and the Japanese consortium to take over Shell's shares.

"But with Shell's value of US $ 2.2 billion, it is difficult to see Inpex, which is financially limited," he said, as quoted by energy voice dot com.

Executive Director of Upstream Consultant, Molyneux Advisors, Simon Molyneux, assessed that the Masela Block project has very high development costs and there are technical challenges that will be faced by potential buyers of Shell participation rights other than companies from Japan, according to him, it is possible that the Indonesian government will open up to investors come from China.

For investors from Japan, chances are, the Mitsubishi Group is also likely to be interested in the Masela Block, given Mitsubishi's lunge in general in Indonesia. Asia Pacific Research Director Wood Mackenzie Andrew Harwood said the plan to release Shell's participation rights in the Masela Block was more complex than the issue that had circulated about Shell's flee in 2019.

It is unlikely for giant oil and gas players to replace Shell in the Masela Block. According to him, there are several national oil and gas companies (NOCs) in the Asian region that have the opportunity to enter the Masela Block. The move is to market LNG to his country.

Rhea Sianipar

Shell Indonesia's Vice President for External Relations Rhea Sianipar was reluctant to answer the amount of the release of participation rights.

Rhea just said, "We cannot provide further comments regarding Shell's portfolio activities. There has been no comment from us," Rhea said.

Acting Corporate Communication Manager of Inpex Masela, Moch N. Kurniawan also declined to comment. But he ensured, his party remained focused on developing the Masela Block Abadi LNG project and was confident that the project would continue.

Nicke Widyawati

What about PT Pertamina (Persero)? When asked whether he was interested in taking Shell's shares in the Masela Block, PT Pertamina's Managing Director Nicke Widyawati only replied that his party was currently looking for opportunities to acquire oil blocks.

 "I am looking for oil, Masela is only gas," said Nicke Widyawati.

Kontan, Page-12, Monday, July 20, 2020

Shell Ensures Downstream Business Continues

Shell Indonesia guarantees that its oil and gas downstream business in Indonesia will remain expansive amid news of the release of the 35% participating interest (PI) of the Shell Group in the Masela Block.

Rhea Sianipar

Shell Indonesia's External Relations Vice President Rhea Sianipar said investment activities in the downstream sector were still being carried out. Even Shell's downstream oil and gas business is very expanding. One example is the development of a Shell lubricant factory in Marunda, North Jakarta.

In this project, Shell is working on increasing the capacity of the lubricant plant. On the other hand, Shell ensures that the gas station business line also continues to be the focus of their business in Indonesia.

"Our retail business has grown to 116 Public Fuel Filling Stations (SPBU), not only reaching big cities, but also small cities in Indonesia," Rhea said.

But She was reluctant to comment on the news of the release of the 35% interest of the Shell Group Interest Participation in the Masela Block.

the Masela Block

"We cannot comment further on Shell's portfolio activities," Rhea said.

While the Inpex Masela Corporate Communication Manager, Moch N. Kumiawan said, currently it is focused on the planned development of the Abadi LNG project, Masela.

"We are confident that this project will continue and we are actively working to implement a development plan (POD) approved by the Indonesian government," he said.

Kontan, Page-10, Monday, July 13, 2020

Inpex Committed to the Masala LNG Project

Inpex and Shell are still discussing the transfer of 30% of Shel's participating interest

Royal Dutch Shell (Shell) 

Inpex Corporation's management is committed and believes that the Masela Block project continues, despite news of the departure of Royal Dutch Shell (Shell) as the owner of 35% participating interest in the block.

Act Corporate Communication Manager of Inpex Masela Moch N Kurniawan said, at this time his side focused on preparing the development of the Abadi LNG project, Masela.

the Abadi LNG Gas Field

"As operators of the Abadi LNG Project and supported by the Government of Indonesia, we believe this project will continue. We are actively working on implementing the plan of development (POD) approved by the Government of Indonesia," said Kurniawan.

However, he did not want to detail the continuation of discussions between Shell and Inpex. Currently, Inpex as the largest shareholder in the block is looking for a replacement for Shell. 

    In the Masela Block, Shell has a participating interest (PI) of 35%. while Inpex Corporation controls 65% PI. Later, the local government will receive a 10% allotment of participation rights, which will be taken from ownership of Shell and Inpex.

The reason for Shell's withdrawal from the Masela Block development project was due to the condition of their cash flow which was affected by the corona pandemic (Covid-19). Shell decided to focus on other projects they were working on in Indonesia.

Previously, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said that the plan to transfer participation rights by Shell still had to obtain the approval of the Minister of Energy and Mineral Resources (ESDM).

SKK Migas Deputy for Operations Julius Wiratno said the government did not interfere in discussions between Inpex and Shell. However, SKK Migas is still guarding to ensure that the discussion does not hamper the implementation of the Masela Block project.

"All the PI transfer processes must be based on the approval of the Minister of Energy and Mineral Resources. Regarding valuation and all business discussions between investors, we are not involved at all," said Julius

He added, Shell did not reveal another reason for the decision to release the participation rights in the Masela Block. Shell only stated that the distressed cash flow condition was the main reason for the decision. The Masela Block Abadi Project this year has entered the approval stage of an analysis of environmental impacts (Amdal).

Until April 2020, the process had reached 45.33396 from the target of 47.96% for the month. The Masela Block Project has also obtained a Decree (SK) for the Determination of Land Procurement Locations for the Abadi LNG auction port on June 1, 2020. The refinery is planned to be built in the Tanimbar Islands, Maluku. 

    Inpex has begun the front end engineering design (FEED) process for onshore LNG projects, floating production and offloading (FPSO), export gas pipelines, and subsea umbilical risers; and flowline (SURF). The project is targeted to operate in the second quarter of 2027, a year later than the initial target.

Kontan, Page-13, Thursday, July 9, 2020

SKK Migas Ensures that the Masela Project Still Runs Even Without the Shell

Shell Corporation, which is a participating interest holder (PI) in the Masela Block, is reported to be planning to leave the oil and gas block. However, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) ensures that the Abadi LNG Project, the Masela Block will continue.

Dwi Soetjipto

SKK Migas Head Dwi Soetjipto admitted that his party had not yet received notification that Shell was releasing its 35% participating stake (farm out) in the Masela Block. The issue of Shell leaving the Masela Block will not stop the Abadi LNG Project. Inpex will continue the project.

the Masela Block

"KKKS (cooperation contract contractor) is committed to continuing the project," he said.

Meanwhile, SKK Migas Deputy for Operations Control Julius Wiratno added, so far, the farm out plan is still limited to discussions between Shell and Inpex as partners.

"There will be an approval from the Minister of Energy and Mineral Resources (ESDM) if it is certain [to release participating shares] right," he said.

The issue of Shell will sell its participation in the Masela Block is not the first time it appears. In May last year, this issue also surfaced following Shell's plan to release a number of assets that had generated the US $ 30 billion in funds. 

    From the sale of PIs in the Masela Block, at that time Shell was eyeing for funds in the amount of US $ 1 billion. However, the issue was denied by SKK Migas at that time.

Meanwhile related to the issue of Shell's withdrawal, Inpex Masela Ltd's Acting Corporate Communication Manager Moch N Kurniawan revealed, his party was not in a position to answer the commercial activities of the oil and gas company. He said he was still focused on developing the Abadi LNG Project, the Masela Block.

"As operators of the Abadi LNG Project and with the support of the Government of Indonesia, we are confident that this project will continue and we are actively working to implement a PoD (the plan of development) approved by the Government of Indonesia," said Kurniawan.

The Abadi Project is targeted to start operating in the second quarter of 2027. The project, valued at the US $ 19.8 billion, which is worked on by Inpex Masela Ltd, is projected to produce 150 MMSCFD of the pipeline through LNG and in the form of LNG 9.5 million tons per year.

Covid-19 affected

Meanwhile related to the progress of the Abadi LNG Project, Julius said, currently, the geological and geophysical survey activities were hampered due to the Covid-19 pandemic. At the end of March, Inpex was supposed to start mobilizing survey equipment but was eventually postponed due to Covid-19. 

    Until now, there is no certainty when the mobilization of tools and labor will continue. However, it is not certain that the delay in survey activities will make the target operation of the Abadi LNG Project backward. The reason is, this project has not been fully ongoing

"And [the process] is still long, because the target [operation] is 7-8 years. However, there will definitely be recovery efforts, "said Julius.

All parties are aware that the Covid-19 pandemic is hitting the oil and gas business, not only in Indonesia but also globally. Therefore, all companies also recalculated their business. The impact of the Covid-19 pandemic on the Abadi LNG Project was also disclosed by Dwi. 

    This impact is not only on project work, but also on gas marketing which is difficult because buyers still see the situation. However, he will try to prevent the project from backing down.

"We are still discussing with Inpex so that onstream does not retreat from 2027," he said.

In terms of gas marketing, so far, Inpex has only received a commitment to purchase gas by PT PLN (Persero) 2-3 million tons per year and PT Pupuk Indonesia (Persero) 150 million standard cubic feet per day / MMSCFD. At least, around 80% of the 9.5 million tons per year gas production must have a purchase commitment so that a final investment decision / FID can be achieved.

Based on SKK Migas data, as of last March, the work on the approval of the Abadi Project environmental impact analysis (Amdal) still reached 43.41% of the target of 47.27%. In addition, the auction process for front end engineering design / FEED of onshore liquefied natural gas / LNG refinery facilities, floating production, storage and offloading (FPSO) facilities, gas pipelines, and umbilical subsea facilities, risers, and flowline (SURF) is still ongoing.

Investor Daily, Page-10, Thursday, July 9, 2020

lnpex Focus on Masela

lnpex Masela Ltd. said it was still focused on developing Abadi Field, the Masela Block in the Arafuru Sea, Maluku. Act Corporate Communication Manager of lnpex Masela Moch N. Kurniawan said lnpex remained committed to continuing the Masela Block development project. With government support, lnpex believes the project to develop the offshore oil and gas block will continue.

Inpex Corporation

"We are actively working to implement the Plan of Development / PoD which was approved by the Indonesian government," he said.

Regarding the news of Shell's withdrawal plan in the Masela Block project, Kurniawan was reluctant to respond to this. He said it had no interest in explaining the news considering it had entered Shell's commercial activities.

"We suggest to immediately ask this to Shell," he said.

When confirmed separately, Shell Indonesia still chose not to comment related to its current position in the Abadi Field project in the Masela Block. 

Rhea Sianipar

    Rhea Sianipar, VP of External Relations of Shell Indonesia, previously said that it was reluctant to comment on the news of Shell's withdrawal from its partnership with lnpex. Meanwhile, Shell originally held 35 shares of participation in the project. The rest is held by Intex and regionally owned enterprises (BUMD) by 10%.

SKK Migas Deputy for Operations Julius Wiratno previously said that Shell had decided to withdraw from the project due to cash flow problems due to projects in other countries that were hampered.

"Inpex doesn't back down, which Shell resigns as a partner. "Everything is going to be taken over by lnpex or is looking for potential partners," he said.

However, later the statement was corrected.

"Until today Shell hasn't left yet, it's a B-to-b discussion / negotiation with lnpex and others. If the Inpex continues, "he said.

Bisnis Indonesia, Page-4, Thursday, July 9, 2020