Pertamina hopes to control JTB gas field project soon
Tuesday, April 11 2017 - 01:22 AM WIB
PT Pertamina EP Cepu (PEPC), an indirect subsidiary of state-owned oil and gas firm PT Pertamina, hopes to be able to control 90 percent interest in Jambaran Tiung Biru (JTB) gas field project next month following completion of negotiation with partner ExxonMobil Cepu Ltd, Bisnis Indonesia reported on Monday.
The paper quoted PEPC President Director Adriansyah as saying that discussions over the remaining tax issue for the acquisition of ExxonMobil Cepu?s 45 percent interest in JTB are expected to be concluded in May.
He added that the company hopes to be able to finalize gas sales and purchase agreement in the second quarter of this year, so that tender process to select the EPC contractor of the project can proceed, in the hope that the JTB project can start gas production in 2020.
As has been previously reported, the government has suggested Pertamina to acquire the interest of ExxonMobil in the JTB gas field project in East Java to allow the project to start development.
Pertamina Upstream Director Syamsu Alam said on January 19 the acquisition option was suggested amid differences between PEPC as the operator of the JTB field project and ExxonMobil Cepu regarding the desired internal rate of return (IRR) of the project. While Pertamina considers an IRR of 12-13 percent is sufficient for the project to be developed, ExxonMobil insists on an IRR of 16 percent.
PEPC holds a 45 percent operating interest in the JTB field project, while ExxonMobil Cepu holds another 45 percent PI, and the remaining 10 percent is jointly held by four local administrations in Central and East Java.
The JTB project was initially expected to start gas production in the first quarter of 2019. The Tiung Biru field is located within PEPC?s operations area which is adjacent to the giant Cepu oil and gas block jointly operated by ExxonMobil Cepu Limited (EMCL). The Jambaran gas field is located within the Cepu block. EMCL and PEPC agreed in September 2012 to unitize both fields with PEPC serving as operator.
Pertamina is set to become the first buyer of the entire planned 170 mmscfd of gas output from the JTB project, after state-owned fertilizer firm PT Pupuk Kujang canceled its earlier plan to buy 70 mmscfd of the planned output. (*)