Chevron may get additional gas supply from S. Sumatra producers

Upstream oil, gas authority BPMIGAS said Chevron Pacific Indonesia (CPI) may get additional gas supply for its steamflood facility in Duri Central Sumatra from Singa field in Lematang PSC, South Sumatra, which is expected to start production in October this year.

BPMIGAS's Chief of Gas and Oil Utilization Ira Miriawati told Petromindo.Com on Tuesday that BPMIGAS is still awaiting confirmation whether state electricity firm PT Perusahaan Listrik Negara (PLN) is ready to offtake Singa gas. ?If PLN is not ready, gas from Lematang could temporarily be supplied to Duri,? she said.

Lematang PSC is operated by PT Medco Energi Internasional Tbk.

PLN is contracted to buy 50 MMCFD of Singa gas for 9 years for its power plant in Java. Gas flow, however, is subject to availability of pipeline capacity to West Java, which is operated by state gas distribution firm PT Perusahaan Gas Negara (PGN).

CPI, a unit US giant Chevron Corp. that runs Indonesia?s biggest oil fields in Central Sumatra, had been suffering from gas supply shortage, which cost the company production opportunity loss of 8,000 barrels per day in 2009 and more next year. CPI uses gas to lift crude at Duri steamflood facilities.

Amount of gas supplied to CPI by ConocoPhillips has fallen as the gas has been diverted to other buyers such as PGN, CPI President Suwito Anggoro said on Monday. Chevron and ConocoPhillips are currently in talks to supply more gas to Duri.

Meanwhile, state oil and gas company PT Pertamina and its partners in Jambi Merang block onshore South Sumatra is also exploring possibilities to sell its future gas production to CPI.

Jambi Merang Pertamina-Hess JOB GM Amran Marwan said that the block would start producing gas in late 2010 with production seen to peak at 120 MMCFD.

Amran said that some 85MMCFD of the block?s production had been contracted to PLN?s power plant in Muara Tawar, Bekasi. ?If PLN is not ready to offtake gas from Jambi Merang, we can sell the gas to CPI,? he said.

Amran said Jambi Merang would also sell some 35 MMCFD of gas from the block to customers on Batam island.

Pertamina has 50% interest in the block with partners Hess Corp and Pacific Oil& Gas having 25% interest each. (godang/bernard)