Chevron eyeing buyers for deepwater gas project

US oil giant Chevron Corp. revealed on Monday it had signed confidentiality agreement had been signed with potential buyers for its deepwater gas project offshore East Kalimantan.

The company said in a presentation during a parliamentary hearing in Jakarta that it had also agreed on a portion of domestic allocation for gas it would produce from the project.

The company did not give detail.

A senior official with upstream oil, gas authority BPMIGAS said that Chevron s currently approaching Japanese buyers and principal of agreement PoA for gas sales would be signed soon. The official declined to give detail about the companies? names.

BPMIGAS Chairman R. Priyono said in February 2009 that Chevron has started talks with Japanese buyers grouped in Western Buyers. The group, which consist of Western Buyers consists of Chubu Electric Power Company (EPC), Kansai EPC, Kyushu EPC, Nippon Steel Co, Ltd, Osaka Gas Co. Ltd and Toho Gas Co Ltd, had just signed a HoA to extend LNG contract from Total-operated Mahakam block in East Kalimantan for another 10 years.

According to Chevron?s production scenario, gas production from the project would start in 2015 at less than 400MMCFd, ramping up to peak production of 900MMCFD in 2018.

The project, known as Indonesia Deepwater (IDD) will be the first deepwater subsea mega project in Indonesia. The project will require development capital of US$7-8.5 billion and first gas is estimated 6.5-8 years from PoD approval. PoD for the project was approved by the government last year.

The project would extract 2-4TCF of gas in the form of development of 5 integrated gas fields in 4 PSCs namely Muara Bakau PSC, Makassar Strait PSC, Ganal PSC and Rapak PSC.

Gas from the fields will boost supply to Bontang LNG plant. (godang/kanti)