SBY to inaugurate Total?s $2b project in East Kalimantan

President Susilo Bambang Yudhoyono is going to gas-rich East Kalimantan to inaugurate the new gas production facilities that will get supplies from Sisi and Nubi fields, Mahakam PSC owned by French firm Total Indonesia E&P.

Total has spent US$2 billion to develop the gas production plant with the capacity of 350 million cubic feet per day (MMCFD) and 5,000 barrels of liquid, the Ministry of Energy and Mineral Resources said in a statement on Friday.

Mahakam has been in production since 1970s. In the beginning, it produced oil but Total later focused on gas production following the discovery of considerable gas reserves in Tambora (1974), Tunu (1977), Peciko (1983), Peciko (1983), Sisi (1986) and Nubi (1992) fields, according Indonesian Oil & Gas Book 2008 published by Petromindo.Com.

The block is now the major supplier of gas to the country?s largest Badak LNG plant in Bontang, East Kalimantan.

During the ceremony, the President will also witness the signing of Memorandum of Agreement (MoA) with the consortium of state owned firms PT Pertamina, PT Perusahaan Listrik Negara (PLN) and PT Perusahaan Gas Negara (PGN) to supply liquefied natural gas (LNG) for the LNG receiving terminal to be built by the consortium in West Java.

?This is the first LNG agreement to be signed for the domestic market, the ministry said.

Indonesia has been producing LNG since late 1970s but all the products are exported.

The consortium plans to build an LNG receiving terminal in West Java to boost gas supplies for industries and power plants in Java. The region now gets supplies from Sumatra and offshore Java through pipeline. (Alex)