Lapindo asked to develop more gas wells

State owned gas company PT PGN?s distribution unit II for East Java has asked gas producer Lapindo Brantas Inc to develop more gas wells in its concession area in Wunut in the province in a bid to help meet the growing gas demand from industrial users.

Trijono, the general manager of PT PGN?s distribution unit II, said in Surabaya on Tuesday that Lapindo needed to increase the gas production to 60 MMSCFD to offset the decline in the gas supply from BP Kangean Ltd.

The decline in the gas supply had severely hurt several major companies in the province including some foreign companies and PT Petrokimia Gresik, he said, warning that if the gas supply shortage continued, many companies may have to close their operations.

"It is therefore urgent for Lapindo Brantas to increase its production capacity so that its supply to PGN could be increased to 60 MMSCFD from 22 MMSCFD at present," he said.

He also proposed PT Kodeco to speed up the construction of its "mini" liquefied petroleum gas (LPG) plant and also to install pipelines linking CPP to Gresik to enable it to increase the gas supply to 150 MMSCFD from 60 MMSCFD at present.

At present PT PGN sells about 77.5 MMSCFD to industrial users in East Java. About 56 MMCFD are supplied by BP Kangean Ltd and the remainders by Lapindo Brantas. The supply from BP Kangean has, however, continued to decline.

Lapindo Brantas operates Brantas PSC block. It has 50 percent working interest in the block while Australia?s Novus Petroleum has the remainder. (*)