Medco receives approval for EPC tender winner for Aceh block

By Febry Silaban

Upstream authority SKK Migas has approved the selection by PT Medco E&P Malaka, a subsidiary of IDX-listed PT Medco Energi Internasional Tbk, of the winner of the Engineering, Procurement, and Construction (EPC) tender for the Block A PSC in Aceh.

This is said by SKK Migas?s Business Support Deputy Rudianto Rimbono to Petromindo.com.

Director of Development at Medco Eka Satria confirmed that the firm has received approval from SKK Migas for the EPC tender result, but did not provide details about the name of tender winner and the project value.

Medco is targeting to start delivering gas from the block in November 2017.

Medco?s President Director Lukman Mahfoedz said earlier the firm?s ability to bring the block into production should be considered a breakthrough in view of the fact that it is located in a very remote area and the gas has a high H2S content.

Last January, Medco signed a Gas Sales and Purchasing Agreement (GSPA) with state owned oil and gas firm PT Pertamina (Persero) on future gas supplies from Block A. Total volume of gas to be supplied under the GSPA is 200 trillion British thermal unit (tbtu) worth US$2 billion with a period of 13 years.

The gas from Block A will be channeled by Pertamina to meet the gas needs of Aceh and North Sumatra provinces. The total volume is 198 tbtu with daily supply amounting to 78 bbtu. The price is set at $9.45 per mmbtu at tie-in point of the Arun-Belawan gas pipeline. Arun is located in Aceh, while Belawan is the main port in North Sumatra.

Block A is 41.67 percent controlled by Medco (operator), 41.66 percent by KrisEnergy and 16.6 percent by Japex.

Editing by Johannes Simbolon