Pertamina eyeing to buy gas from Chevron?s deepwater project

State oil and gas company PT Pertamina (Persero) said it has commenced talks with US giant Chevron Corp. to buy LNG from the latter?s proposed ultra-deepwater gas project in Kutei Basin, East Kalimantan.

CEO Karen Agustiawan said on Thursday that Pertamina is interested to buy LNG from the project, known as Indonesia Deepwater Development (IDD) to boost domestic gas supply.

She did not disclose the volume of LNG the company is seeking to buy.

Pertamina, together with state gas distribution firm PT Perusahaan Gas Negara (PGN) are constructing a 3MTPA floating LNG receiving terminal in Jakarta Bay and Pertamina on its own is also planning to build a similar facility in East Java. Both facilities are expected to become onstream in late 2011 or early 2012.

A Petromindo.Com source said that Chevron may allocate 25 percent of its overall production from IDD to serve domestic market as mandated by the government?s regulation.

IDD project will be the first deepwater subsea mega project in Indonesia. The project will require development capital of US$7-8.5 billion and first gas is estimated 6.5-8 years from PoD approval. PoD for the project was approved in 2004.

The project would extract 2-4TCF of gas in the form of development of 5 integrated gas fields in Chevron?s 4 PSCs namely Muara Bakau PSC, Makassar Strait PSC, Ganal PSC and Rapak PSC.

Gas from the fields will boost supply to Bontang LNG plant.

According to Chevron?s production scenario According to Chevron?s production scenario, gas production from the project would start in 2015 at less than 400MMCFD, ramping up to peak production of 900MMCFD in 2018. (godang)