Pertamina eyeing stake in giant gas blocks

State oil and gas company PT Pertamina is eyeing stakes in three giant gas fields in East Kalimantan and Timor sea.

Vice President Director Iin Arifin Takhyan told Petromindo.Com on Friday that Pertamina is eyeing a stake in Total SA?s Mahakam PSC gas block, which currently produces 2.6 BCFD of gas and is the main gas supplier to Bontang LNG plant.

The Mahakam PSC contract will expire in 2017. Total and its partner Inpex Corp is trying to win 20-year extension for the block from the government and pledges billion of dollars in investment, should the partnership be granted an contract extension. One of Total and Inpex?s strategies to ensure extension is to bring Pertamina into partnership in Mahakam PSC, a source familiar with the situation told Petromindo.Com.

Iin, however, declined to disclose the percentage of interest Pertamina was seeking in the block. ? It?s too early to say. We?ll negotiate on business-to-business basis,? he said.

Iin also said Pertamina is interested to acquire a stake in Chevron Corp.?s deepwater gas project offshore East Kalimantan, which has the potential to supply 800 MMCFD of gas to Bontang LNG lant when fully developed in 2013 and Inpex?s Masela Gas block in Timor Sea, which will be developed into a 5 MTPA LNG plant in 2015-16.

?Pertamina wants more than 10 percent stake in both Chevron?s deepwater project and Masela,? Iin said. Under the Indonesian Oil, Gas Law, Indonesian national oil company has the right to acquire 10 percent stake in any blocks after plan of development (PoD) is approved.

Chevron and Inpex had submitted PoDs to develop their respective blocks and approvals are likely to be granted this year.

The source said that acquisition of interest in the giant gas fields is part of Pertamina?s strategy to maintain presence in Indonesian LNG production as Pertamina will most likely be stripped of its privilege to manage Indonesia?s LNG production. ?If Pertamina is able to realize the acquisition, it will add to its world-class LNG portfolio to complement its Natuna D Alpha project in Natuna, which is most likely be built into an LNG project and Donggi LNG project in Central Sulawesi,? the source added. (alex)