Unocal to start delivering Gendalo gas to Bontang LNG in 2008: Report

U.S. oil and gas firm Unocal expects to start pumping gas from the Gendalo Hub in 2008 and the Gehem Hub in early 2011, both fields are located offshore East Kalimantan, to reinforce supply of massive Bontang liquefied natural gas project, the company said Thursday.

"We want to make sure that all our customers in Bontang understand that with the new deepwater projects they will have a new source from multiple new fields," Randy Howard, vice president of Unocal's global gas business told Reuters.

Howard said the two projects were expected to supply Bontang for a combined 20 years.

Gendalo Hub, of which Unocal is the operator, has an estimated gas reserve of 1.7-3.7 trillion cubic feet (TCF), while Gehem has a gross gas reserve of 1.1-2.0 TCF.

The huge Bontang project was negotiating with existing customers to renew supply contracts and also seeking new buyers, Howard said on the sidelines of the LNG Supplies for Asian Markets conference.

"Probably in the next year you will see more activities of additional marketing," he said.

Indonesia, the world's top LNG exporter, is struggling to meet export commitments for this year due to declining output.

Arun on Sumatra island and Bontang have a combined capacity to supply 34 million tons a year of the super-cooled, compressed natural gas to buyers in Japan, South Korea and Taiwan.

Bontang has an annual supply capacity of about 23 million tons and contracts for two thirds of the capacity will expire in 2010. (*)