Oilfields development
Kangean, consortium sign $871m leasing deal
Kangean Energi Indonesia signed a contract Friday to lease a floating production unit from a consortium of three companies to facilitate gas production at the Terang, Sirasun and Batur (TSB) gas fields in offshore East Java.
The consortium comprises floating production specialist BW Offshore of Norway, PT Energy Consulting Indonesia and PT Pelayaran Trans Parau Sorat.
Imam P. Agustino, president director of PT Energi Mega Persada (EMP), a shareholder of Kangean Energi, said the contract was for a 14-year lease valued at US$871 million. The floating production facility, he said, could process up to 340 million cubic feet of gas per day.
The gas fields were expected to commence production at a rate of 300 million cubic feet a day in late 2011 or early 2012, he added.
EMP holds a 50 percent stake in Kangean, with the remaining owned by Japan’s Mitsubishi Corporation and Japan Petroleum Exploration with a 25 percent stake each.
“The gas will be transported from the production unit through a sub-sea pipeline extending 350 kilometers from the tie point to East Java gas receiving facilities and distributed to various buyers in East Java,” Imam said after the contract signing at the Ritz-Carlton Hotel in Jakarta.
He said he expected the gas supply from the three gas fields would be able to meet future demand in East Java for generating electricity, fueling industrial plants and feeding fertilizer plants.
“The pipeline has a throughput capacity of 600 million cubic feet of gas per day, but currently transports only about 30 million cubic feet of gas,” he said.
EMP investor relations officer Herwin W. Hidayat said that with 50 percent ownership in Kangean Energi, EMP would get an additional interest of 150 million cubic feet of gas from the fields, equivalent to 25,000 barrels of oil.
Apart from holding half of Kangean Energi, EMP operates eight oil and gas assets in Indonesia with an oil and gas reserves of 363 million barrel of oil equivalent. During the first quarter of 2009, the company produced an average of 29,600 billion of oil equivalent per day of oil and gas.
Kangean Energy Indonesia is the operator of the Kangean production sharing contract area located around the easternmost islands of East Java province with the total contract area of 4,509.52 square kilometers. The area is divided into five exploration blocks: Pagerungan, Karang Takat, Sepanjang, South Saubi, Terang Sirasun Bantur and South Celukan.
