Pertamina to allocate 25% East Natuna gas to domestic market

By Godang Sitompul

State oil and gas firm PT Pertamina said it was ready to allocate 25 percent of the gas to be produced from the East Natuna block to domestic market, once the government completed the formulation of PSC scheme?s terms and conditions later this year which would right away start the block?s development.

?After the government finished the formulation of terms and conditions of the PSC scheme this year, we are ready to deliver 25 percent of the gas to domestic market and the remaining 75 percent to regional, including to buyers in Southeast Asia,? Pertamina Upstream Director M. Husein told petromindo.com.

Husein said already on standby are buyers from Thailand.

The block holds one of the biggest untapped gas reserves in Asia, estimated at 46 trillion cubic feet (tcf). However, as the reserve has significant CO2 contents, the costs of the project are projected to be unusually high because Pertamina and partners will have to clean the gas of the CO2 elements.

In December 2010, Pertamina signed agreements with Exxon Mobil, Total and Petronas as partners to develop the Natuna gas field. The project is expected to cost Pertamina and its partners between US$20 billion to $40 billion, depending on the gas delivery and production methods. But Petronas resigned from the project early this year.

Editing by Dadan Wijaksana