Pertamina asks for right to sell IDD gas
Friday, March 14 2014 - 04:00 AM WIB
State oil, gas company has submitted request to the government to be appointed as seller for gas from Chevron Corp.-operated Indonesia Deepwater Development (IDD) gas project offshore East Kalimantan, a top official from upstream oil, gas authority SKK MIGAS said on Thursday.
Chairman Johannes Widjanarko told Petromindo.Com on Thursday that government may grant Pertamina?s request for uncommitted gas from IDD.
?Currently Chevron has been appointed as seller for ongoing negotiation with buyers. We will give recommendation to the ministry of energy and mineral resources that Pertamina be appointed as seller for IDD?s uncommitted gas,? he said, adding that the power to appoint gas seller lies in the hand of the ministry of energy.
An industry source said that Chevron is currently in negotiation to supply LNG from IDD to Japanese companies TEPCO, Mitsui and Osaka Gas. Other source said that Chevron is also in negotiation to sell IDD gas to South Korea.
The source said that Pertamina submitted request to become IDD gas seller in the middle of negotiation thus if granted risked to jeopardize the process. ?One of the solution is that there will be clause for contract addendum to transfer seller from Chevron to Pertamina a few years after the gas sales agreements has been signed,? the source said.
Chevron is planning to make final investment decision on the giant gas project this year with first gas planned in 2018.
The IDD project is located in the Makassar Strait offshore East Kalimantan in water depths of approximately 6,000 feet. The project will include two separate hub developments, each with its own floating production unit (FPU), subsea drill centers, export gas and condensate pipelines and an onshore receiving facility. Gas from the project will be used both domestically and also converted to liquefied natural gas (LNG) at the Bontang LNG facility for export. Maximum daily production from the project is expected to be 1.1 billion cubic feet of natural gas and 31,000 barrels of condensate.
Editing by Reiner Simanjuntak