Consortium Of State Companies To Operate Masela Project: Kadin

Jakarta (Antara Bali) - The Indonesian Chamber of Commerce and Industry (Kadin) said the government could establish a consortium of state companies (BUMN) to operate the Masela gas block if the foreign investors decided that they are no longer interested in the project.

The foreign investors for the giant gas project are Inpex Corp. of Japan and Shell of the Netherlands respectively with  share splits of 65 percent and 35 percent.

There are possibility that the two investors would abandon the project after the government decided to build the liquefied natural gas plant (LNG) on shore .

The investors have submitted proposal to build floating LNG plant saying the cost is much cheaper than one on shore that would need additional cost of building underwater pipelines.

Kadin's deputy chairman Andi Rukman Karumpa said the government did not have to worry over fund to build the project as many local and foreign financiers are interested in the project.

"Many banks would jump over each other to finance the project," Rukman said here on Monday.

As for competency  in explorations, the country has many consultants and experts, he said.

Earlier BUMN Minister Rini Soemarno said BUMNs were ready to take over the management of the Masela gas block if Inpex and Shell are no longer interested in it.

Lawmaker from the Commission VII of the parliament Iskan Qolba Lubis said the project should be awarded to BUMNs.

"The interest of BUMNs, instead of foreign investors. The question is not over whether the LNG plant is to be build onshore or offshore," he said.

However, chief of the Upstream Oil and Gas Regulator (SKK Migas) Amien Sunaryadi said Inpex and Shell are still keen to continue development of the project.

After President Joko Widodo announced his decision that the LNG plant is to be built on shore, Amien held a meeting with the foreign investors.

Amien told them about the government decision and that they have to revise their plan of development (PoD) .

The investors asked for time to study the the government decision and that they most like ask for  more incentive, he said.

So far the incentives asked by oil and gas contractors include domestic market obligation (DMO) holiday, tax holiday  and investment credits. (WDY)