Total to spend $1.5 billion on Indonesian gas

Eric Watkins
Senior Correspondent

LOS ANGELES, Oct. 27 -- Total SA of France plans to spend $1.5 billion on gas development in Indonesia, with a special focus on its offshore Sisi and Nubi fields.

The fields are off East Kalimantan in the Mahakam block operated by Total E&P Indonesie in partnership with Inpex Corp., Tokyo, under a production-sharing contract.

Ananda Idris, a spokesman for Total E&P Indonesie, said Total expects Sisi and Nubi to start producing gas in 2007 at target rates totaling 500 MMscfd of gas.

He said output at the fields will help the company maintain its supply to PT Badak NGL's LNG plant in Bontang, East Kalimantan.

Total currently produces about 2.5 bcfd of gas in Indonesia, which is less than its peak production of 2.7 bcfd. Next year's target is to continue production at 2.5 bcfd, said Ananda.

The Bontang plant relies heavily on Total, which supplies most of its gas needs. Output from aging fields operated by Chevron Corp. and Vico Indonesia is reported to in decline, leaving Total as Bontang's main supplier.

In September, Total E&P Indonesie awarded PT Nippon Steel Construction Indonesia, a subsidiary of Nippon Steel Corp., an engineering, procurement, and construction contract for three offshore platforms for Sisi and Nubi.

The contract covers engineering, procurement, fabrication, and offshore installation.

The engineering and procurement will be performed in Jakarta; the fabrication of the platforms will be done in Nippon Steel's fabrication yard in Batam, Indonesia; and the offshore installation will be performed by Nippon Steel's Kuroshio derrick and lay barge.

Another contractor will lay pipe. Platform deliveries are scheduled for the second quarter of 2007.

Earlier, Total Indonesie awarded South Korea's Hyundai Heavy Industries an $86 million turnkey contract for a 55-km subsea pipeline from Sisi and Nubi to onshore facilities (OGJ Online, Sept. 1, 2005).

Spokesman Ananda said Total will drill in several other fields, including the fifth phase of Peciko field and the 10th phase of Tunu fiend 10 in Kalimantan.

On Oct. 28, Indonesian President Susilo Bambang Yudhoyono is to launch production from Total's Peciko Phase IV field, which is expected to produce 1.25 bcfd of gas.

Total's current operation sites cover an area of 2,000 hectares, with seven oil and gas fields and 500 production wells in remote areas in East Kalimantan, including Handil, Bekapai, Peciko, Tambora, and Tunu.

Contact Eric Watkins at hippalus@spidernet.com.cy.

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