Medco finalizes drilling of 3 CBM wells in Sekayu
Monday, May 14 2012 - 03:23 AM WIB
PT Medco Energi International Tbk (Medco Energi) said that it had finalized until now the drilling of 3 wells of the coalbed methane (CBM) project in Sekayu Block, South Sumatra.
?Two wells of all three are undergoing a process of dewatering,? Medco Energi Corporate Secretary Cisca Alimin said in Jakarta on Monday.
The company has targeted to finalize the drillings of 4 wells in Sekayu Block during this year. The CBM from the block has been used for power generation in the CBM gathering station in Musi Banyuasin.
?This year, we have also planned to use the CBM to generate electricity for people living around our operation,? she said.
She added that the CBM would also be used to support the government program of ?CBM to Power?. To realize the program, it had signed an agreement with a local mining and energy company owned by the local administration at the end of 2011.
?Under the program, Medco will supply 0.2 MMSCFD of gas during the next five years,? she said.
Medco is the operator of Sekayu Block, which has a CBM reserve of 1,70 TCS. It has a 50 percent interest in the block, while the other 50 percent owned by its partner South Sumatra Energy Inc (SSE Inc).
The company was reportedly seeking government approval to amend the contract terms of the CBM development in the Sekayu block in order to allow the company to commercialize the CBM extracted during the dewatering process.
?PT Medco EP Indonesia proposes an amendment to the government over the contract terms on commercialization of the Sekayu CBM PSC during the stage of dewatering process. The existing contract terms do not allow for commercialization of the block during the dewatering stage. We want to amend it,? spokesperson of PT Medco EP Indonesia, Joang Laksono, said recently.
Currently, Medco Energi has signed three Production Sharing Contracts (PSCs) of CBM, located in South Sumatra and overlaying with Medco Energi?s oil and gas PSCs working areas.
The three CBM PSCs are in Sekayu, Muralim, and Lematang blocks. Medco Energi is the operator in the Sekayu CBM PSC and a non-operating partner in the Muralim CBM PSC, which is operated by Dart Energy.
It has been also reported that PT Medco Energy CBM Indonesia, a subsidiary of PT Medco Energi Internasional Tbk, had signed a memorandum of understanding with Korea Gas Corporation (Kogas) to develop coal bed methane (CBM) project in South Sumatra.
Medco Energi and KOGAS will jointly identify and study the best possibilities in implementing projects that can monetize and add value to CBM, including business opportunities relating to CBM industry, such as Liquefied Natural Gas (LNG), pipelined gas, and Dimethyl Ether (DME).
"We are proud that KOGAS the largest LNG players in Asia has selected Medco Energi to become partners in the development of gas in Indonesia , either natural gas or CBM," said Hilmi Panigoro, Medco Energi President Commissioner.
"This signing shows KOGAS? confidence towards Medco Energi and demonstrates that the Company always remains as ?the Energy Company of Choice? for its partners," he said.
Editing by Benget Besalicto Tnb.