A unit of Japan's Inpex Corp signed on Wednesday a memorandum of understanding to supply gas to Indonesian state companies PT Perusahaan Listrik Negara (PLN) and PT Pupuk Indonesia.
It would be the first sales deal for gas produced from Indonesia's Masela block after the government approved last year Inpex's revised development plan for the $20 billion project.
Pupuk Indonesia is expected to buy 150 million standard cubic feet per day via pipeline, which Pupuk will use to feed a refinery, upstream oil and gas regulator SKK Migas said in a statement.
PLN is estimated to take 2 million to 3 million tonnes of liquefied natural gas (LNG) per year, PLN director Syofvi Felienty Roekman told reporters on the sideline of the MoU signing ceremony.
Inpex, which controls 65% of the project, planned to start front-end engineering design (FEED) this year with the aim of starting LNG production from Masela in 2027-2028.
The plant is expected to produce 9.5 million tonnes of LNG a year from the block, as well as distribute 150 million standard cubic feet per day (mmscfd) of gas through its pipeline.
(Reporting by Wilda Asmarini; Writing by Fransiska Nangoy; Editing by Edmund Blair)
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