Indonesia expects to decide within one or two weeks on a plan by Inpex Corp. to increase proposed output from the Masela natural gas field to nearly 4x the level originally slated, a senior energy official said on Oct. 21.

"We are still discussing the capacity of Masela--between 7.5 mtpa [million tonnes per annum] and 9.5 mtpa," said Coordinating Maritime Minister Luhut Pandjaitan, referring to discussions between the government and Inpex along with its partner, Royal Dutch Shell Plc (NYSE: RDS.A).

Pandjaitan, who oversees resources as the maritime minister, said that a decision would likely come in the next few weeks.

A spokesman for Inpex in Jakarta confirmed the ongoing discussions. "There are several conditions we need for this project to be investable," he said, though he did not confirm the proposed output increase.

This would be the second time Inpex, Japan's biggest energy developer, and Shell, the world's top LNG trader, have proposed to increase output from the deepsea field offshore eastern Indonesia. The field was initially expected to produce 2.5 mpta of LNG.

In March, Malaysia's President Joko Widodo rejected a $15 billion plan by Inpex and Shell to develop the world's largest floating LNG facility to process gas from Masela Field, saying an onshore plant would benefit the local economy more.

The move was a blow to both companies and pushed the anticipated start of production from the field into the late 2020s.

An onshore LNG plant will now be developed on either the islands of Aru or Saumlaki, Pandjaitan said. This will hopefully spur construction of petrochemical and fertilizer plants in the eastern province of Maluku, an impoverished area with little development.

"One of these two locations will be chosen," he said. "We don't just want to develop petrochemicals there. We also want to develop the fishing industry and tourism."

Indonesia gets priority on a large portion of domestically produced LNG, but development of infrastructure to absorb the fuel has been slower than hoped for both locally and abroad, putting pressure on gas prices.

Inpex is also working with BP Plc (NYSE: BP), Mitsubishi Corp., China National Offshore Oil Co. and other companies on an $8 billion expansion of the Tangguh project in West Papua province that will boost the project's annual LNG production capacity by 50%.

Questions remain on how quickly Indonesia can develop infrastructure to absorb gas from these projects, with at least 60 uncommitted cargoes this year and next.