Sumatra gas producers brace to supply West Java

May 3, 2004
Producers indicate that good progress has been made toward the sale of gas to West Java from fields in South Sumatra, Indonesia. ...

Producers indicate that good progress has been made toward the sale of gas to West Java from fields in South Sumatra, Indonesia.

The gas is to be produced from the ConocoPhillips operated Corridor Block and other blocks in South Sumatra. PT Exspan Nusantara, Jakarta, is another main gas supplier to South Sumatra and plans to supply gas to West Java when a pipeline becomes available starting in 2006.

Corridor gas

Talisman Energy Inc., with a 36% interest in the Corridor Production Sharing Contract, plans to spend $65 million in 2004, including $53 million on development and $12 million on exploration. Spending was $41 million in 2003.

The Corridor Block already provides 380 MMcfd to the steamflood at Duri oil field and 40 MMcfd to Singapore. Contracts were being finalized and pipeline tie-ins prepared in early 2004 to sell 300 bcf to Batam Island off Singapore.

A heads of agreement signed last year provides for the sale of 2.4 tcf of Corridor Block gas to West Java. Startup of that sale in 2006 would enable Talisman to book 800 bcf of reserves, probably over two years, and sell 144 MMcfd of gas.

Part of the Indonesian Integrated Gas Transmission (PTGI) system, the Grissik to West Java pipeline is a planned 584 km, 600 MMscfd line. It would originate at the Grissik gas plant on the Corridor Block and cross the Sunda Strait near Cilegon, West Java (OGJ Online, Aug. 5, 2003).

The pipeline builder, Indonesia's state PGN, has agreed to the tariff and various contract terms and has arranged financing. Completion will allow the purchaser, a power generator, to switch to gas from diesel at a savings of $1 million/day, Talisman said. Final agreements are expected to be conclcuded in mid-2004.

PT Exspan

PT Exspan signed a heads of agreement valued at $983 million to supply PT Krakatau Steel with 393 bcf of gas from 2006 to 2017.

Exspan will supply the gas from fields on the Lematang and 7,143 sq km South Sumatra Extension blocks in South Sumatra. The contract calls for 100 MMscfd at a cost of $2.50/ MMbtu.

Exspan in late 2003 signed an agreement to supply 42 bcf at 13 MMscfd to supply a generating plant at Borang, an industrial area east of Palembang. It is to supply this gas at $2.60/MMbtu from Rambutan, Teras, Lagan, Pian, Soka, and other fields on the South Sumatra Extension block.

Deliveries are to start in August 2004 through a 120-km pipeline.

Exspan also plans to supply gas from South Sumatra to three other Indonesian purchasers. Exspan took over management of the Lematang Block in October 2003. The block contains Harimau, Singa, Banteng, Tapir, Siamang, Kijang, and Tupai fields.

Harimau field has been operating since 1991 (OGJ, Oct. 1, 1990, p. 30). It delivers gas to the Pusri fertilizer plant in Palembang and condensate to Prabumulih.

Exspan is preparing a development plan for Singa gas field. Singa and Banteng fields are to provide gas for domestic needs, including West Java.