Oil, gas firms sign gas delivery contract
Friday, December 22 2000 - 04:00 AM WIB
The state-owned oil and gas firm Pertamina, PT Caltex Pacific Indonesia and the Corridor Block production sharing contract partners (PSC) which include Gulf Indonesia Resources Ltd., Talisman (Corridor) Ltd., signed Thursday agreement for additional gas deliveries from the corridor block PSC area to CPI's Duri Steamflood oil production operations in Central Sumatra.
"This is a great deal for all parties and further strengthens the role of natural gas as a strategic resource for Indonesia," said president and CEO of Gulf Indonesia William T. Fanagan in a press statement issued by Pertamina's foreign contractor management body (BPPKA).
The statement said the terms of these agreements included a contract quantity of 1.1 trillion cubic feet (tcf) of sales gas to be delivered over a term of 19 years.
It said gas deliveries are expected to commence in mid 2002 at 12 million cubic feet per day (mmcfd) increasing to 180 mmcfd by mid 2003.
Gas supplied under the new contract will supplement the gas that is currently being delivered from the Corridor Block PSC to the Duri Steamflood operations at rates of about 305 mmcfd declining to 245 mmcf/d in 2003.
"Using cleaner burning gas in place of oil, currently used as fuel to generate power and steam for the Duri Steamflood, will improve air quality and help CPI achieve one of our core values by protecting the environment," stated Humayunbosha, CPI's president. "In addition, Uri crude oil exports will increase by around 180 million barrels over the contract term, generating billion of U.S. dollars in foreign exchange for the benefit of the people of Indonesia."
The statement said that natural gas for the new contract will be supplied from the Suban field in the Corridor Block PSC area in South Sumatra Indonesia after the construction of field facilities and a trunk line from the field to the Grissik gas plant.
It added that the natural gas will then be delivered through the existing 544-kilometer Grissik to Duri pipeline owned and operated by PT Perusahaan Gas Negara (PGN), the Indonesian state gas distribution and transmission company. PGN will install compression facilities to expand the capacity of the pipeline to meet the increased demand from CPI under this new contract.
"Overall, the development of the natural gas pipeline infrastructure will help fulfill a long-term strategic use of Indonesia's natural resources that should result in lower transportation costs and subsequently reduced delivered gas prices. This should further stimulate and grow the gas market within Indonesia and other surrounding countries, again benefiting the people of our country," said Baihaki Hakim, Pertamina's president. (Godang S.)