The Indonesian government and Inpex Masela Ltd reportedly have agreed to develop gas from the Masela block in eastern Indonesia and build a floating liquefied natural gas plant with a total investment of US$14 billion.

The plan of development (PoD) is to be signed in November and the project is expected to be operational early 2015 with a annual LNG production capacity of 4.5 million tons, an official said.

Head of the Upstream Oil and Gas Regulatory Agency (BP Migas) R. Priyono said Inpex has agreed to change its previous PoD.

Originally Inpex proposed to build the LNG plant in Darwin, Australia but the proposal was rejected by the government.

Inpex has no other visible choice but to build a floating plant off the island of Arafura, the newspaper Bisnis Indoensia quoted Priyono as saying.

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