Rizal Ramli disagrees with SKK Migas recommendation regarding the development of Masela Block with floating refinery, even though the recommendation has been reviewed for 2 years.

KATADATA - The government has postponed the final decision result regarding the plan of development 1 of Masela Block, which will be announced in December 2015. In the next two months, the Energy and Mineral Resources (EMR) Ministry gives the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) to look into the PoD Masela again together with world-class independent consultant. 

The review will be conducted towards the two options to develop Masela Block. The first option is Masela Block will be developed by using production facility in the form of floating refinery (FLNG). This project is predicted to eat up funding to US$ 14.8 billion. The second option here is the onshore refinery development. This production facility is planned to be built in Aru Island, and is predicted to consume up to US$ 19.3 billion. 

SKK Migas has recommended choosing the FLNG option because the technology is more beneficial for Indonesia, since the FLNG development would mostly use local components. The FLNG scheme would revive the national shipyard industry. The floating refinery will even become the first pilot project in Indonesia, and would be the largest FLNG in the world. 

However if the government is choosing the onshore refinery option, the cost would be more expensive because it has to be prepared with the pipes development as well as storage tanks and production in the sea (FPSO). The pipes development under the sea is seen to be very risky because it is said that there is a very deep manger that goes on into the abyss, which would endanger the pipes installation when it is productive. 

But then, the Maritime Coordinating Minister Rizal Ramli is bluntly challenging SKK Migas’ recommendation. According to the minister, SKK Migas’ calculation is wrong. The development would be more beneficial with the onshore scheme instead, where the gas would be distributed or channeled with pipes to the onshore refinery in Aru Island. And so, the gas can be used for the fertilizer and petrochemical industries around the refinery.

Leafy Anjangi