Indonesia delivers Natuna Sea gas to Malaysia

Indonesian state oil and gas enterprise Pertamina has begun deliveries of natural gas to Malaysia from the South Natuna Block B producing area off Indonesia.

By OGJ editors

HOUSTON, Aug. 19 -- Indonesian state oil and gas enterprise Pertamina has begun deliveries of natural gas to Malaysia from the South Natuna Block B producing area off Indonesia.

Under a sales agreement inked in 2001 between Pertamina and Malaysia's state-owned oil and gas company Petronas, Pertamina will deliver 1.5 tcf of natural gas to Malaysia from Block B over a 20-year period. The gas was valued at $4 billion when the agreement was made (OGJ Online, Mar. 29, 2001).

Conoco Inc., operator of Block B, began initial deliveries this month of 100 MMcfd, which are expected to increase to 250 MMcfd by 2007. The natural gas is being produced from Conoco's Hang Tuah moveable offshore production unit and is flowing to the Petronas-operated Duyong field complex off peninsular Malaysia via a 96 km pipeline that Conoco operates under a separate agreement.

As part of the Block B production-sharing contract with Pertamina, Conoco holds a 40% interest in the field; Tokyo-based Inpex Masela Ltd. holds 35%, and Texaco Inc.—now ChevronTexaco Corp.—has 25%.

The supply agreement is expected to enhance the relationship between Indonesia and Malaysia, Conoco said, and create opportunities for further petroleum sector cooperation.

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