JAKARTA – Japan’s Inpex Corporation and Royal Dutch Shell are in bitter conflict over Indonesia’s giant Masela natural gas project, slowing the US$20 billion venture to a crawl and raising questions whether it will be another decade before it gets off the ground.
Shell has wanted out of the project since the new Joko Widodo government insisted on an onshore development in 2015, removing the need for the company’s floating liquified natural gas (FLNG) technology that brought it into the deal in the first place.
Time is not on the government’s side if it expects to earn foreign exchange from the venture. Market analysts say a 2030 start-up means that Masela’s useful life may only be 20 years when many gas-guzzling countries aim to be carbon-neutral by 2050.