Pertamina, Petronas to Buy Shell's Masela Gas Stake for $650 Million
Indonesia's Pertamina and Malaysia's Petronas signed an agreement with Shell on Tuesday to buy its 35% stake in the Masela natural gas block for up to $650 million, moving the project forward after years of delay.
Pertamina Hulu Energi (PHE) will take 20% and Petronas Masela Sdn Bhd will take a 15% stake in the Indonesian gas block, the companies said at a signing ceremony at the Indonesia Petroleum Association conference.
The base consideration for the sale is $325 million with a contingent amount of $325 million to be paid when the final investment decision is taken on the Abadi LNG project, Shell said in a statement.
Abadi LNG, led by Japan's Inpex Corp., will use gas from the Masela block, located 150 km (93 miles) offshore of Saumlaki in Maluku province, to produce 9.5 million metric tons per year of LNG at its peak which will be exported from the proposed terminal.
The transaction should be completed in the third quarter, subject to several conditions, including regulatory approval from Indonesia's Ministry of Energy and Mineral Resources, Shell added.
"The decision to sell our participation in the Masela PSC is in line with our focus on disciplined capital allocation," said Zoe Yujnovich, Shell's integrated gas and upstream director.
Pertamina CEO Nicke Widyawati said in a statement that purchase of the stake was intended to ensure adequate oil and gas supply for national energy needs.
She touted the experience of upstream unit PHE in the exploration, development, and production of gas fields, including its operation of the Badak LNG plant.