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Drilling/Production Gulf Canada Resources sets gas development in Sumatra

Feb. 19, 1996

Gulf Canada's Projects [84354 bytes] Gulf Canada Resources Ltd., Calgary, is stepping up its gas development campaign in Sumatra. The company's wholly owned Asamera Oil (Indonesia) Ltd. has received approval in principle from Indonesia's Pertamina to develop gas reserves in the Block A contract area in Northwest Sumatra. Based on reserves identified in the development plan, an estimated 585 bcf of gas will be produced during the life of the project at a rate of about 200 MMcfd

Gulf Canada's Projects [84354 bytes]

Gulf Canada Resources Ltd., Calgary, is stepping up its gas development campaign in Sumatra.

The company's wholly owned Asamera Oil (Indonesia) Ltd. has received approval in principle from Indonesia's Pertamina to develop gas reserves in the Block A contract area in Northwest Sumatra.

Based on reserves identified in the development plan, an estimated 585 bcf of gas will be produced during the life of the project at a rate of about 200 MMcfd starting in 1999.

Gulf Canada and Talisman Energy Inc. earlier secured financing for their $600 million Corridor Block gas development project in Southeast Sumatra (OGJ, Feb. 5, p. 34).

Block A gas will be liquefied via excess capacity at the PT Arun LNG plant, about 80 km northwest of Block A. During the primary production period, output will amount to an estimated 15.4 cargoes (about 45 trillion BTU)/year of LNG, along with about 4,100 b/d of condensate.

LNG is destined for sale in eastern Asia.

Current LNG prices are based on the monthly average price for crude oil exported from Indonesia. That and the price of condensate historically average about 90% of the West Texas intermediate crude oil price.

Gas for the project will come from Alur Siwah, Alur Rambong, and Julu Rayeu fields. Asamera, project operator, will build field facilities, a gathering system, and a gas processing plant.

New pipelines will deliver gas and condensate to the main metering point in Arun gas field, 45 km away, where they will connect with existing pipelines to PT Arun.

Additional reserves available from development and exploration drilling on Block A can be placed on stream to fill surplus capacity at the new gas processing plant.

The initial estimate of capital costs to project start-up is a little less than $300 million.

Asamera and Japan's Aceh Gas & Oil Co. are 50-50 partners in Block A under a production sharing contract with Pertamina.