Masela Block Polemics, Finance Minister: Onshore is also Good

Oleh Andrew Chandra 27 January 2016

There are many government officials and economists that support the offshore FLNG scheme. Now, Bambang Brodjonegoro, the Finance Minister, stated his support for the onshore Pipeline scheme.

Bambang Brodjonegoro
Finance Minister Bambang Brodjonegoro Arief Kamaludin|KATADATA

KATADATA - The polemics regarding Masela Block’s development scheme continues to linger this year. Instead of making final decision, the government’s officials are still debating amongst themselves regarding the plan of development (PoD) for the oil and gas block that is located in Arafura Sea, Moluccas. Amid this polemics, the Finance Minister, Bambang Brodjonegoro, stated his support for the onshore pipeline scheme. 

All this time the Energy and Mineral Resources Minister, Special Task Force for Upstream Oil and Gas Business Activities, and several other observers support the offshore FLNG scheme. And now, it seems that Minister Bambang supports the onshore pipeline scheme, which was the scheme that Rizal Ramli, the Coordinating Maritime and Mineral Resources Minister, suggested to the government. “I only give my opinion, if it is onshore, it is also good,” Bambang said in his office on Monday, January 25.

Many sides, including from an economist of Indonesia University, Faisal Basri, really dislike Bambang’s attitude in this matter. This Deputy Head of the Counterpart Team for Masela Block said that Bambang’s support for the onshore scheme has surpassed his area of expertise as the Finance Minister. In Faisal’s opinion, the onshore scheme is not efficient at all, and it includes much importance of the sides that support it. (Read more: Masela Block Polemics, Faisal Basri: Who owns the Pipe Company?

Rizal Ramli, who supported the onshore scheme in the first place, stated that FLNG scheme will have a much more expensive development cost compared to the onshore pipeline scheme. He also said that there would be smaller multiplier effect for the economic growth of the surrounding areas. 

Furthermore, he said that FLNG scheme is more risky in terms of the safety, stability, and reliability of the operation. Rizal claimed that before the gas is delivered to large ships, the gas must be compressed with very low temperature, minus 160° Celsius. If there is earthquake or large waves during the moving process to the ships, there is a great potential of burning hazard. He also said that FLNG scheme is only fit for small gas fields that are located in far-from-land (marginal) areas. And up until now, there has not a single insurance company that dares to bear the risk of FLNG project.

(Read more: Masela Block Polemics: Conflict between Rizal and Sudirman continues, EMR Ministry chooses Offshore Development Scheme for Masela Block, & By using Onshore Scheme, Masela Project can be delayed)

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