Chevron may sell E. Kalimantan gas to Japan

US oil, gas giant Chevron Corp. may sell its future LNG production from its deepwater gas project offshore East Kalimantan to Japanese market, a senior official at upstream oil, gas authority BPMIGAS said on Monday.

Chairman R. Priyono said 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.

Priyono said he would meet with Chevron?s senior official to get the exact schedule of the project start-up. ?I?ll ask Chevron to make sure about the schedule of the project,? he said.

Chevron IndoAsia Deputy managing Director Suwito Anggoro in January 2009 said that Chevron is currently reviewing the deepwater project due to financial melt down and falling energy prices. Suwito also said that Chevron is currently making preparation to tender the project?s FEED.

Michael Craig, Project Manager Indonesia Deepwater-Chevron IndoAsia said in January 2009 the company?s deepwater r gas project offshore would produce 1BCFD at its peak rate.

He said that the project, which will be the first deepwater subsea mega project in Indonesia would 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.

Craig went on to say that 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. (godang)