Pertamina, Medco to tender E. Kalimantan pipeline project

PT. Pertagas, a wholly-owned gas distribution unit of state oil and gas company PT Pertamina (Persero, is scheduled to tender an engineering, procurement, construction (EPC) contract to develop a 70-km pipeline from Simenggaris PSC in East Kalimantan to the methanol plant on nearby Bunyu Island by the end of this year, the company?s top official said.

Pertagas President Director Suharyanto told Petromindo.Com that the Pertagas is currently preparing a pre-Front End Engineering and Design (FEED) for the pipeline project. ?The FEED will be made by ourself (Pertagas),? he said.

Total investment for the project is about US$29 million, and the project is expected to come on-stream in late 2011, he said.

The pipeline project is owned by Pertagas in a joint venture with Medco Gas Indonesia, a subsidiary of PT Medco Energi Internasional Tbk with 70 percent stake and 30 percent, respectively. The gas from the field will be also bought by the consortium, he added.

The Bunyu methanol plant, owned by Pertamina but was operated by Medco, has been suspended for years due to the lack of gas.

In February 2010, Suharyanto said that the methanol plant, which was handed back to Pertamina by Medco, will be operated by Pertagas.

In August 2009, a gas sales agreement was signed between Pertagas and Medco Gas for gas sales from the South Sembakung field, Simenggaris PSC. The agreement covers the supply of approximately 20 MMscfd of gas over an 11-year period, starting end of 2011 at a minimum price of $3.00/Mscf plus an inflator linked to methanol prices. (bernard)