Tail gas from Exxon?s NSO block to go to three firms
Friday, August 22 2014 - 01:18 AM WIB
Upstream authority SKK Migas Acting Chief, Johanes Widjonarko, said that the leftover gas, also known as tail gas, would be allocated to state-owned electricity company PT PLN, fertilizer firm PT Pupuk Iskandar Muda (PIM) and paper firm PT Kertas Kraft Aceh (KKA).
?The sale of the gas is still being discussed. We are looking at advantages for all, where PIM won?t be burdened with high costs and the tail gas is monetized,? Widjonarko said.
The leftover gas from the NSO field comes down to 100 to 150 million standard cubic feet per day. Widjonarko did not elaborate on the proportion of gas that each of the three companies would receive.
The government is trying to boost gas usage in the domestic market. SKK Migas is aiming for domestic gas delivery to reach 53.8 percent of total production by the end of the year.
Most gas from the NSO is currently sent to the Arun liquefaction plant in Blang Lancang, Lhokseumawe. However, the field is now depleted and will no longer be able to send enough gas to be processed into liquefied natural gas (LNG).The Arun plant is expected to produce its last LNG in October.
Some of the gas from the field is currently also sent to PIM and KKA, according to ExxonMobil vice presi?dent for public and government affairs Erwin Maryoto.
The delivery from the NSO block to PIM is part of a swap agreement. PIM had previously been scheduled to receive six cargoes of gas in the form of LNG this year from Tangguh field in Papua, but this was canceled due to the lack of a regasification facility.
PIM will instead receive six cargoes of gas from ExxonMobil?s NSO block, while the six cargoes of LNG from Tangguh have been redirected to South Korea, which was formerly supplied by ExxonMobil.
?The tail gas is earmarked for domestic use. So far we have delivered to PIM and KKA and the delivery can continue. However, it is the government that must decide," Erwin said.
Given the significant volume of the tail gas, PT Pertamina Gas (Pertagas), a subsidiary of state-owned oil and gas giant PT Pertamina, has requested to buy it from the NSO block. Pertagas wishes to channel the gas through its Arun-Belawan pipeline to clients in North Sumatra, including PLN and companies in other sectors.
?Pertamina?s proposal is to aggregate the tail gas for customers except PIM and KKA. The possible customers include PLN and other companies. A deal on the sale of gas would be struck between PLN and Pertamina,? Pertagas president director Hendra Jaya said.
Pertagas is awaiting approval for the plan. Pertagas?s Arun-Belawan pipeline is now under development and is expected to be ready for op-eration by October. The facility will deliver gas that has been treated at the Arun regasification plant, which will receive LNG sent from the Tangguh plant in Papua. (*)