The Indonesian government has reached a deal with Japan's biggest oil and gas developer, Inpex Corp., on the framework for a $20 billion development plan for an onshore liquefied natural gas facility. An agreement is expected to be signed on the sidelines of the Group of 20 summit in Osaka in June.
In a statement Monday, Indonesia's Ministry of Energy and Mineral Resources said that after over 20 years of negotiations, both sides achieved a win-win solution in which Indonesia will get a 50 percent share in production from the Masela gas block in its eastern province of Maluku.
The deal was reached during a meeting between Energy and Mineral Resources Minister Ignasius Jonan and Inpex CEO Takayuki Ueda in Tokyo.
It is estimated that the Masela block, located in the Arafura Sea, will be able to produce 1.200 billion standard cubic feet per day of gas and 24,000 barrels per day of condensate for 24 years, according to the ministry.
The block is currently 65 percent controlled by Inpex and 35 percent by Royal Dutch Shell PLC.
The facility is scheduled to become fully operational in 2024 and start piping gas in 2026, two years before Inpex's and Shell's contracts expire.