PGN to develop S. Sumatra-West Java gas pipeline
Thursday, September 13 2001 - 02:11 AM WIB
President of PGN Qoyum Tjandranegara signed on Thursday an agreement with president of the state-owned oil and gas firm Pertamina Baihaki Hakim to deliver the gas. The signing ceremony agreement was witnessed by Minister of Energy and Mineral Resources Purnomo Yusgiantoro.
Pertamina?s deputy upstream director Eteng salam said the gas would be priced between US$2-$2.3 per MMBTU at the well head in Pagardewa, South Sumatra.
Baihaki said gas would be supplied at the rate of 250 million standard cubic feet per day (MMCFD) for 20 years starting 2005.
Pertamina would supply most of the gas from its own gas fields in South Sumatra while the rest would be supplied from Pertamina contractors' gas fields.
Baihaki further said that Pertamina would spend some US$ 500 million over the next few years to develop its Sumatra gas fields.
"Pertamina will spend the money to develop 22 gas fields structure, drilling 60 new wells and redevelopment of 40 old wells as well as the contraction of 2300km-inch inter-gas field pipeline and compressors procurement," said Baihaki.
He said that currently proven and probable gas reserve in Pertamina's South Sumatra gas fields had reached 3.8 trillion cubic feet (TCF) and Pertamina hoped to increase the reserve to 5 TCF in the coming years.
The 640-km gas pipeline will be able to flow some 600 MMCF of gas per day.
Meanwhile, Qoyum said that the first gas delivery would take place in the first quarter of 2005.
The gas delivery agreement is needed to anticipate the increasing gas demand in the industrial area of West Java.
Qoyum said that the Word Bank had agreed to partly finance the project, while Japan Government's loan which had been freezed over the past few years due to Indonesian political uncertainty would soon be revived.(Alex/Godang)