Total sees E. Kalimantan gas production stable until 2010

French energy giant Total SA expects the gas production from its Mahakam PSC, East Kalimantan to remain stable at around 2.6 BCFD until at least 2010.

?Mahakam PSC has reached peak production. Total is trying to keep production at this current level with the planned development of the Sisi and Nubi field, which could produce 400MMCFD of gas at peak production,? Ananda Idris, Total E&P Indonesie corporate communication manager, told Petromindo.Com in an interview.

He said that the gas supplies from the fields, which is expected to commence next year, would offset production declines from other fields. ?Total is confident that 2.6 BCFD production level could be sustained until at least 2010,? he said.

Mahakam PSC, where Total is the operator and a 50 percent interest holder, is currently supplying around 75 percent of the gas needs of the province's Bontang LNG plant. Other Bontang gas suppliers Chevron and Vico Indonesia are unable to meet their gas supply commitment due to maturing gas fields and the lack of new gas field development. The drop in the Vico and Chevron supplies has forced Bontang to cut LNG shipments to Japan, South Korea and Taiwan.

Ananda said that Mahakam PSC still had uncommitted gas reserves that would enable Total to provide gas to meet Bontang's LNG contract extension. ?Mahakam PSC could provide gas equivalent to 3 million tons per annum to Bontang to meet the plant's LNG contract extension,? he said.

Some 12 million ton per annum (MTPA) contracts betweenn Indonesia and Japanese buyers will expire in 2011. Government had earlier said that it would only be willing to negotiate 6 MTPA contract extension with LNG-hungry Japanese buyers. However, the government recently signaled that it may not approve the contract extension and instead would dedicate East Kalimantan's uncommitted reserves for domestic use. ?The government may tell Japanese buyers to find LNG from somewhere else,? a BPMIGAS official said.

An industry source said that Mahakam PSC has some 13 TCF of uncommitted gas.

Total is currently seeking to extend contract extension for Mahakam PSC, which will expire in 2017. BPMIGAS Chairman Kardaya Warnika said that under current regulation, Total may ask for contract extension in 2007, or 10 years before the contract lapses. The authority to extend PSC contract, he said, lies with Minister of Energy and Mineral Resources.

Japanese oil and gas firm Inpex Corp. has a 50 percent interest in Mahakam PSC. (alex)