Medco to soon sign Block A gas supply deal
Monday, August 11 2014 - 12:54 AM WIB
IDX-listed oil and gas company PT Medco Energi International Tbk hopes to soon conclude an agreement for the supply of gas from Block A in Aceh to customers in neighboring North Sumatra Province via a 370-Km Arun-Belawan pipeline.
Medco Energi President Director Lukman Mahfoedz said that the gas sales agreement was currently being finalized, which is expected to be signed this month, as his company has reached an agreement with state-owned oil and gas firm PT Pertamina and fertilizer firm PT Pupuk Iskandar Muda (PIM) for a new gas supply scheme.
Medco, the operator of the Block A, initially planned to supply gas to PIM. But considering among others the considerable distance between the gas field and the PIM facility, the company redirect the gas delivery to the Arun-Belawan pipeline, while PIM would get gas from Pertamina?s Arun regasification plant in Aceh, which is closer.
?The scheme which has been approved is for Medco to deliver 58 mmscfd of gas from Block A to the Arun-Belawan pipeline to be distributed in North Sumatra. In exchange, Pertamina will deliver gas from its Arun regasification plant to the PIM facility at a volume of 54 mmscfd,? Lukman told Petromindo.com.
?This program will reduce the volume of gas needed for compression, due to the considerable distance between the location of Block A and PIM. PIM will also benefit from more competitive transportation costs,? he added.
Lukman said that the redirection plan has been supported by the upstream oil and gas authority SKK Migas, and the Ministry of Energy and Mineral Resources.
If the gas sales agreement could be signed in August, gas from Block A fields could be delivered to the Arun-Belawan pipeline in 2016, he said.
Editing by Reiner Simanjuntak