Medco wants to sell Aceh gas at above $4.5 per MMBTU

JSX-listed energy firm Medco Energi Internasional Tbk wants the price of gas from Block A in Naggroe Aceh Darussalam to be  above US$4.5 per million british thermal unit (MMBTU), the company director said.

 

The incentive from the production split is not enough to cover its investment for the development of the block, which has reached more than $450 million and there was no infrastructure at all at the block, Medco’s director of corporate affairs and development Rashid I Mangunkusumo said in Jakarta.

 

Rashid said on May 14, Medco and the gas potential buyer, state owned fertilizer firm PT Pupuk Iskandar Muda (PIM)would hold intensive negotiations on terms and conditions, including the volume and price of gas, to conclude the deal. Rashid hinted that the entire gas production from Block A would be sold to PIM, which is in desperate need of gas after supply from ExxonMobil’s gas fields dwindled due to reserves depletion.

 

Medco E&P Indonesia CEO Lukman Mahfoedz told Petromindo.Com in an earlier interview that the block would commence gas delivery in mid-2010 with estimated gas flow of 110 MMCFD with further upside potential. Medco E&P is a unit of Medco.

 

The block is operated by Medco with 41.67 percent interest. Other participants are Japex and (41.67 percent) and Premier Oil (16.67 percent). Contractors would get 49 percent gas split from the block.(*)