Pertamina sees no gas shortage in East Java

State oil and gas firm Pertamina anticipates no gas shortage in East Java in the next two years despite a possible decline in the production of BP Plc's gas field in Pagerungan, Kangean production sharing contract (PSC), offshore East Java.

Pertamina's director for production sharing management Effendi Situmorang, told reporters in Jakarta Tuesday that the plan was underway for Pertamina to develop at least three new gas fields to cover up for BP's production drop.

Currently BP produces some 320 million standard cubic feet of gas per day (MMCFD), fulfilling 90 percent of East Java?s gas demand. The balance has come from Korean oil and gas firm Kodeco and Lapindo Brantas gas fields.

However, starting from 2003, gas supply from Pagerungan would start to drop due to reserve depletion, and this would consequently lead to potential gas shortage in East Java.

Effendi said that currently talks were underway to start producing natural gas in a field in Ujung Pangkah (production sharing contract), which is operated by US oil, gas firm Amerada Hess, in the fourth quarter of 2003 with initial production of 20 MMCFD. Production would gradually be increased to more than 100 MMCFD in 2005, Effendi added.

Further, Kodeco and Lapindo Brantas would ramp up gas production starting from 2003, Effendi said.

"Therefore, we shall see no gas shortage in 2003 and 2004," Effendi noted.

He added Pertamina would not set gas prices for any new contracts.

"Production sharing contractors are free to compete and set their own prices so as to enhance competitiveness among gas producers," Effendi said.

Meanwhile, another executive of Pertamina, Trijana, said that other than the three projects, there were some gas fields which were ready to be developed such as those of ExxonMobil, Santos in Sampang, Pertamina in Suci, and Gulf Indonesia Resource. (alex/godang)