Rick Wilkinson
OGJ Correspondent
MELBOURNE, Oct. 5 -- Santos Ltd., Adelaide, has begun natural gas production from Maleo field off eastern Java under a $550 million deal with Indonesia's state-owned PT Perusahaan Gas Negara (PGN).
Santos has agreed to sell 243 bcf of gas to PGN for 8-12 years.
The new gas supply is expected to reduce east Java's diesel fuel consumption by 6.75 million kl.
Gas will be supplied at a plateau rate of 110 MMcfd for 5-6 years, then tail down as the field depletes.
The $75 million development comprises a mobile offshore production unit supported by a new six-well wellhead platform connected to a 7.4-km spur line to the existing East Java Gas Pipeline.
From there gas is distributed to the Surabya and Gresik gas grid.
The field was discovered in 2002 and contains proved and probable reserves of 240 bcf.
Santos has a 75% interest in the Maleo partnership, and Petronas subsidiary PC Madura holds the remaining 25%.
