Lemigas says evaluation of Kepodang field still in progress
Wednesday, September 6 2017 - 01:40 AM WIB
The Center for Research and Development of Oil and Gas Technology (or Lemigas) of the Ministry of Energy and Mineral Resources said that evaluation of the Kepodang field in Muriah PSC, offshore East Java, is still in progress.
Lemigas Head Bambang Widarsono said on Tuesday that once completed, his office will report the results to Minister of Energy and Mineral Resources Ignasius Jonan. ?It (evaluation of Kepodang field) is still in progress. We?ll report to the minister once it has been completed,? he told Petromindo.com, but did not say when.
Lemigas has been assigned by upstream oil and gas authority SKK Migas to carry out independent assessment of the condition in the Kepodang field after operator Petronas Carigali Muriah Ltd in July sought for SKK Migas and government approval to declare force majeure due to its inability to fulfill gas contract volume from Kepodang field to the Tambak Lorok power plant owned by state electricity firm PT PLN.
SKK Migas Deputy Operations Fatar Yani told Petromindo.Com in July that Petronas only managed to supply 70 mmcfd of gas from contracted volume out of 110 mmcfd contracted volume due fast decline in gas reserves because of previous over estimation of the size of the field?s reservoir.
Meanwhile, Senior Manager Corporate Affairs and Administrations Petronas Carigali Indonesia Andiono Setiawan told Petromindo.com that the company is awaiting for the results of the Lemigas assessment before deciding what measures to be taken. He said the company is making coordination with SKK Migas, the ministry, PLN, and PT Kalimantan Gas Jawa (KJG), which operates the pipeline to transmit gas to the Tambak Lorok power plant.
PLN Director of Strategic Procurement 2 Supangkat Iwan Santoso said on August 29 that the utility company was looking at option to end its current gas supply contract with Petronas Carigali Muriah, and will seek for alternative supply including from LNG for its PLTGU Tambak Lorok combined-cycle power plant in Semarang, Central Java.
Supangkat said that the planned move comes after the Ministry of Energy and Mineral Resources and upstream authority SKK Migas approved in July request by Petronas Carigali to declare force majeure status for the Kepodang field.
?It has been declared as force majeure. If so, the option is for termination (of the gas supply contract). Each are exempted (from their respective responsibilities). PLN is no longer obliged to buy (the Kepodang gas), while the supplier is also no longer obliged to make the supply,? he explained.
Failing to fulfill its gas supply contract will risk Petronas paying penalty including to PLN and KJG.
Editing by Reiner Simanjuntak