Reuters: Indonesia Rejects Inpex's Mega Floating LNG Project

Indonesia's president on Wednesday rejected Inpex Corp and Royal Dutch Shell's proposal to build the world's largest floating liquefied natural gas plant in the country's east, saying an onshore plant would benefit its economy more.

The announcement is a blow to the two energy firms, as well as to Indonesia's energy regulator (SKKMigas), which warned last week that rejecting the $15 billion plan to process gas from the Masela field offshore would lead to delays and job cuts.

Shell and Inpex declined to immediately comment on the matter as they said they had not received official notification on the decision. It is unclear whether the companies would be involved in the onshore project.

President Joko Widodo said he backed the onshore LNG plan because it would provide bigger economic payoffs to Indonesia's impoverished east than the 7.5 million-tonne-per-year floating LNG project. MORE