Govt to decide on Kepodang gas field development by year-end

The government said it will make a decision on the the scenario of the development of Kepodang gas field located in north offshore Central Java by year end, said Director General for Oil and Gas at the Energy and Mineral Resources Ministry (ESDM) Evita H. Legowo.

The gas from the field will be delivered to Tambak Lorok gas fired power plant owned by state electricity company PT PLN.

?ESDM Minister Jero Wacik has asked us to immediately find solution on the Kepodang gas field development by the end of this year,? Evita told Petromindo.com.

She said the discussion now focuses on resolving some terms and conditions, but the decline to provide further details. The energy ministry is facilitating the talks on the Kepodang gas development between the upstream oil and gas regulator BPMIGAS and Petronas, the operator of Kepodang gas field.

On Monday, spokesperson of BPMIGAS, Gde Pradnyana, told Petromindo.com that options being discussed include raising the gas price to adjust with the change of scenario in the development of the gas field, and extending the Petronas contract in operating the Kepodang field.

The project has been delayed due to changes in scenario of the construction of the gas pipeline from Kepodang field to PLN?s power plant Tambak Lorok.

In 2008, PLN made an agreement with Petronas that it would receive 354 billion cubic feet (bcf) of gas until 2021 from 4th quarter 2011. According to the initial plan, the pipeline would be built by Petronas as part of its contract in the operation of the Kepodang gas field.

In 2009, Bakrie & Brothers, holder of the Kalimantan Java gas pipeline project, proposed to build the pipeline network from the Kepodang field to the Tambaklorok Power Plant as part of the company?s Kalimantan-Java pipeline project.

After a series of negotiations held in late 2010, the government approved Bakrie & Brothers? proposal and an early estimate suggested that the company would start the gas delivery in the fourth quarter of 2014.

The change of scenario had sparked some friction between the government and Petronas, causing the delay in the development of the Kepodang gas field. (godang)