Interview - Gulf Indonesia to Invest US$ 1,5 billion to boost gas supply
Monday, September 25 2000 - 06:30 AM WIB
Oil and gas company Gulf Indonesia Resources (GIR) a unit of Gulf Canada Resources ltd, would invest US$ 1,5 billion for the next three years to boosts its gas operation in outh Sumatera to add gas supply to American oil and gas company PT Caltex Pacific Indonesia in Riau and send new gas supply to Gas Supply Private Ltd. In Singapore, the company said.
Company vice president for administration affairs Supramu Santosa said GIR would develop both the Sumpal and Suban field of the Corridor Block in South Sumatera for the planned gas sale contract with both companies.
"Thus, we will invest about US$ 500 million annually in the next three years, mainly for drilling and the construction of gas facilities, " Supramu told Petromindo.com in recent interview.
Supramu said GIR was looking to add gas supply to Caltex by between 120 and 180 MMCFD from 310 MMCFD at present.
"The negotiation (between GIR and Caltex) is expected to be completed in the next few days," Supramu said.
GIR send its natural gas from its Grissik gas plant in South Sumatera to Caltex's Duri oilfield in Riau through a 540 kilometer-long pipeline owned by state gas distribution company PT PGN. Caltex uses the gas for the burning purpose at its oil production activities.
According to Supramu PGN needs only to add compressor to the existing pipeline to transmit the additional gas supplies from Gulf to Caltex.
Gulf expected to start delivering the additional gas sometime in 2002, Supramu said.
"This Caltex II deal will be effective for 20 years and would generate total revenue of US$2,5 billion. The government will receive US$1,5 billion," Supramu said.
GIR will also send its Sumatera gas to Singapore under the gas sale contract to be signed by state oil and gas company Pertamina and Gas Supply Private ltd, which is a subsidiary of Singapore Power.
Pertamina has signed the preliminary agreement with the Singaporean company on Sept. 6 for the gas supply and the final agreement was expected to be signed by mid-November this year.
According to Supramuy. According to Supramu, GIR would account 55% of the total gas supply to Singapore , while the remaining 45% will be delivered from the gas fields operated by Santa Fe Energy Resources. The gas supply will start at 150 MMCFD in 2003 and will be increased to a peak rate of 350 MMCFD by 2009 for a total contract period of 20 years.
The gas will also be transported through the pipeline to be partly built by PGN from South Sumatera to Singapore border.
The Sumatran gas will be the second major gas agreement signed by Pertamina and Singaporean company. Pertamina has also signed a gas sale deal with Singapore's Sembawang gas to supply pipeline gas from the West Natuna area of the South China Sea.
GIR is the member of West Natuna Gas Consortium that will supply gas to Sembawang for 22 years starting from January next year. Other consortium members are Conoco of the US and Premier Oil of Britain.
Supramu said that GIR was also looking for chances to supply another future gas sale to Malaysia, but it could not participate in the impending gas sale contract to be signed by Pertamina gas sale to Malaysia and Malaysian State oil company Petronas due to the lack of its gas resources in West Natuna.
Conoco has said it would become the exclusive gas supplier to Malaysia under the contract to be signed by Pertamina and Petronas.
Supramu however noted that GIR believes that Malaysia would still need more gas and the company expected to supply gas to Malaysia through Singapore in the future.
"Our certified gas reserve in South Sumatera, is much higher than the amount of gas supply to Singapore Power's unit, " Supramu said.
Aside from the Corridor Block in South Sumatera and Kakap Block in West Natuna, GIR also operates among others the South Jambi Block in Jambi, and the Ketapang Block in East Java and The Sebuku Block off the coast of East Kalimantan in the Makassar Strait. It also has a 50% stake in the A Block in Aceh in 50-50 partnerships with Exxon-Mobil.
Supramu said GIR and Exxon-Mobil are now eyeing a deal to supply gas for Aceh's A Block to fertilizer company PT Pupuk Iskandar Muda in Lhok Seumawe, North Aceh.
He said the Block contained 600 bcf of natural gas.
"We are now in negotiation stage. Hopefully, security conditions in Aceh improve and PIM can continue its delayed expansion program and the A Block can be developed," Supramu said.
According to Supramu, GIR currently produces a total of 85,00 boepd, including 39,000 barrels of oil per day. The oil output comes from Kakap (14,400 bpd), Ramba area in South Sumatera (13,500bpd), Grissik area (6,600 bpd), Jambi (4,200 bpd) and Aceh (300bpd) (alex)