By an OGJ Online Correspondent
JAKARTA, Jan. 15 -- Malaysia's Petronas is in talks with Indonesian state company Pertamina to buy 1 bcfd of gas for 20 years from fields in the South China Sea.
The source of the South China Sea contract would be the ExxonMobil Indonesia Inc.-operated Block Alpha-D, of which Pertamina owns 24%.
In the first quarter of 2001, Petronas agreed to buy 250 MMcfd of gas for 20 years from Conoco Inc.'s Block B in the West Natuna Sea, in which Pertamina has a stake (OGJ Online, Mar. 29, 2001).
Sources in Kuala Lumpur said Petronas is short of gas for the fast-expanding Peninsular Malaysia market, as most of its reserves are near Borneo Island and are dedicated to liquefied natural gas exports.
Pertamina and Petronas officials will meet next week in Kuala Lumpur to discuss the proposed Alpha-D contract, which would start in 2010, said Pertamina upstream director Iin Arifin Takhyan.
Alpha-D gas in place is estimated at more than 222 tcf but recoverable gas is only 46 tcf because of high levels of carbon dioxide, which also will make it very expensive to develop the block.
Pertamina has reopened talks with the Petroleum Authority of Thailand (PTT) for gas from the Alpha-D block. An earlier deal was suspended due to the 1997-98 Asian financial crisis. If both Petronas and PTT agree to take 1 bcfd of gas, the deal could work.