SK, Pertamina in LNG supply deal with Chevron

By Godang Sitompul

South Korean firm SK Corp and state oil, gas company PT Pertamina (Persero) have signed deal to buy LNG from Chevron?s IDD gas project in East Kalimantan, paving way for Chevron to make final investment decision for the project, an official with upstream regulatory body SKKMigas said.

Deputy for Commercialization Widyawan Prawiraatmadja told Petromindo.Com on Tuesday that with the deal, 50% of IDD?s future production has been sold. He did not give detail.

Separately, SKKMigas spokesperson Zudaldi Rafdi said that under the deal, SK will buy 1.5MTPA of LNG or equal to 26 cargoes per year for 10 years, while Pertamina will get 1.5 MTPA, ramping down to 0.5 MTPA for 8 years.

He said the start up of the shipment is still under discussion as the project?s onstream schedule will be pushed back.

Several buyers including Japan?s TEPCO and South Korea?s Kogas have reportedly dropped their bid to buy gas from IDD due to the project?s delay.

SKKMigas Chairman Johannes Widjonarko said last month that the project will be delayed by 18 months to 2018-19 due to complication in EPC tendering process and contract extension of one of the PSCs that make up IDD project.

The IDD project is expected to produce 1.1 BCFD of gas and 31,000 BPD of condensate. Gas from IDD project will be processed into LNG at Badak LNG plant in Bontang.

Editing by Alexander Ginting