Conoco soon to announce winner of tender for West Natuna facilities
More gas demand expected from Singapore and Malaysia in the future
Monday, July 30 2001 - 05:35 AM WIB
?The tender process for the FPSO is already underway. We?ve got three international consortium bidders and right now we are waiting for (state oil and gas company) Pertamina?s approval for our recommendation.,? Conoco Indonesia?s president Patrick L. Meyer told petromindo.com on the sideline of Conoco Indonesia's gas delivery industrial dinner in Jakarta over the weekend.
Patrick however said he did not remember the names of the bidders.
The FPSO facilities, said Meyer, will be able to process 350 million cubic feet per day (MMCFD) of gas and to handle the extraction of 20,000 barrels of liquefied petroleum gas (LPG) per day and 75,000 barrel of oil per day.
The project is expected to come on stream in the middle of 2004.
?This facility will be used to process gas that goes to Malaysia and Singapore when both contracts reach their full capacity,? he said.
Meyer declined to give the investment number, but industry sources said that the construction for the facilities would reach close to US$ 650 million.
Conoco has signed the contract to supply gas to Singapore and Malaysia from its gas fields in the West Natuna area. Aside from Conoco?s fields, gas supplies to Singapore will also come from British firm Premier Oil and Canadian firm Gulf Indonesia Resources? fields in the area, while the supplies to Malaysia would only come from Conoco?s fields.
Conoco started gas supplies to Singapore last June 27 and the gas delivery to Malaysia is expected to start in August 2002.
The company has completed the construction of the moveable offshore gas production unit (MogPU), called ?Hang Tuah?, to process gas before being delivered to Singapore through a Conoco-operated West Natuna Transportation System (WNTS), which is a 656-kilometer subsea pipelines.
Meyer said the Hang Tuah moveable platform was able to handle 300 MMCFD of gas. Thus together with the FPSO, which will come on stream in 2004, Conoco?s facilities in the West Natuna area will be able to handle a total of 650 MMCFD of gas.
Meanwhile, under the contracts, Meyer said, Conoco?s gas supplies to Singapore will peak at about 140 MMCFD, while gas supplies to Malaysia at 250 MMCFD. Thus, the total gas volume to be processed at the Hang Tuah platform and the FPSO will total close to 400 MMCFD
?It means by 2004 we would have some 250 MMCFD extra capacity,? Meyer said.
Meyer however said he was not worried that the extra capacity would remain idle as he was optimistic that gas demands from Malaysia and Singapore will increase.
?The extra capacity will allow for additional future gas sales
?The first two contract that we have (with Malaysia) and Singapore is a very strong foundation for future incremental sales,? said Meyer.
?I would not be surprised if Singapore is going to buy more gas because Singapore?s economy will continue to grow. So is their petrochemical and power generation sectors and I think eventually they?ll be delivering gas for households.
?It would not take a great deal of imagination for them to buy twice as much gas as they currently contracted. May be additional demand could come in the next five year. If they want more gas at that time, we will be in position to deliver that,? Meyer said.
According to Meyer, the uncommitted and proven reserve from its Block B in West Natuna is currently about 700 ? 800 billion cubic feet.
However, he said, the reserve could be continually increasing as Block B is a huge and potential area and further drillings would commence to add for the new reserve.
?We?ll be starting new drilling campaign in September (this year) -- five exploration wells and four development wells. The program is expected to be completed in May next year,? Meyer said.
He said the four development well are scheduled to meet the Malaysian contract, while the five exploration wells were expected to cover the future gas commitment.
Conoco Inc recently bought Gulf Canada resources, which has 72 percent stake in Gulf Indonesia Resources, making Conoco Indonesia the country?s biggest non-LNG gas producer.
As the operator, Conoco holds a 40-percent interest in the Block B production sharing contract (PSC), along with Inpex (35 percent) and Texaco (25 percent), in partnership with Indonesian state-owned oil company Pertamina. (godang/alex)