The Indonesian government on Monday reached a deal with Inpex Corp. of Japan on the framework for a $20 billion development plan for an onshore liquefied natural gas facility and an agreement is expected to be signed on the sidelines of the summit of Group of 20 major economies in Osaka in June.
In a statement, the 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 Corp. CEO Takayuki Ueda in Tokyo.
It is estimated that the Masela block, located in the Arafura Sea, will be able to produce 1,200 million 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, a British-Dutch oil and gas company headquartered in the Netherlands.
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.