Medco may supply gas to Chevron?s C. Sumatra unit

PT Medco E&P Indonesia, a subsidiary of IDX-listed energy firm PT Medco Energi Internasional Tbk said it was in talks to supply gas to Chevron Pacific Indonesia (CPI) steam flood facility in Duri, Central Sumatra from South Sumatra gas field.

President Director Budi Basuki told Petromindo.Com on Wednesday said that Medco may supply gas its Singa field in Lematang PSC, which is expected to start production in October this year.

Budi said that under the deal, Singa may supply gas to CPI for three years, to ease gas shortage suffered by CPI. If the deal goes through, Medco will divert part of gas originally allocated to state electricity firm PLN to supply CPI.

?Talks with relevant parties are underway now,? he said.

Medco has clinched deal to supply 50MMCFD of PLN?s power plant in West Java for 9 years, but PLN might not be able to immediately offtake Singa gas due to capacity constraint at Sumatra to Java pipeline, from which Singa gas would be transported to West Java.

He did not disclose the price CPI is willing to pay for Singa gas.

CPI, a unit US giant Chevron Corp. that runs Indonesia?s biggest oil fields in Central Sumatra, had been suffering from gas supply shortage, which cost the company production opportunity loss of 8,000 barrels per day in 2009 and more next year. CPI uses gas to lift crude at Duri steamflood facilities.

Volume of gas supplied to CPI by ConocoPhillips has fallen as the gas has been diverted to other buyers such as PGN, CPI President Suwito Anggoro said earlier this month. Chevron and ConocoPhillips are currently in talks to supply more gas to Duri. (godang)