SKK Migas to audit Jambaran-Tiung Biru project

Upstream authority SKKMigas plans to launch an audit into the development cost of the Jambaran-Tiung Biru (JTB) field project in Central Java in a bid to seek ways to help bring down the price of the gas output.

?We?ll conduct an audit to see whether the development cost can be reduced, including in the procurement of its production facilities,? SKK Migas deputy for operation control Fatar Yani Abdurrahman said in Jakarta recently as reported by thejakartapost.com.

PT Pertamina EP Cepu (PEP Cepu) is the operator of the JTB project, which is expected to start gas production in 2020. The Tiung Biru field is located within PEP Cepu?s operations area which is adjacent to the giant Cepu oil and gas block jointly operated by ExxonMobil Cepu Limited (EMCL). The Jambaran gas field is located within the Cepu block. EMCL and PEP agreed in September 2012 to unitize both fields with PEP Cepu serving as operator. PEP Cepu is set to soon acquire Exxon?s 45 percent interest in Jambaran.

State-owned electricity firm PT PLN is set to become the buyer of gas from the JTB field project. However, there has been a deadlock over the gas price, as PLN is only willing to pay $7 per mmbtu for the gas at its plant gate in Gresik, while PEP Cepu wants the price of $7 per mmbtu at its wellhead in the JTB field. (*)