Indonesia's Pertamina Inks 30-Year Gas Supply Deal With PLN

Indonesia's Pertamina Inks 30-Year Gas Supply Deal With PLN

Indonesian state-owned energy company Pertamina signed a preliminary
agreement on Aug. 8 to supply state electricity utility Perusahaan Listrik
Negara (PLN) with natural gas for the next 30 years.

"This is just the beginning," Deputy Energy and Mineral Resources Minister
Arcandra Tahar told reporters, indicating that the deal would be formalized
at a later date.

Under the heads of agreement, Pertamina agreed to sell 100 million cubic
feet per day (MMcf/d) of natural gas to PLN at a price of $7.60 per million
British thermal units. Pertamina also plans to sell 72 MMcf/d of gas from
the field to local industry, Tahar said.

Of that amount, $6.70 is for the gas itself and 90 cents is a toll fee for a
gas pipeline.

The gas will be supplied from the Jambaran-Tiung Biru field in East Java,
which has not started producing yet.

Output from the Jambaran wellhead is expected to reach 330 MMcf/d, but up to
35% of that is expected to be carbon dioxide, said Pertamina EP Cepu
President Director Adriansyah, who goes by one name only.

"There's a lot of impurities," he said, referring to sulfur and carbon
dioxide content.

Production from the field is expected begin in late 2020 or 2021 and plateau
for 16 years, after which it would begin to decline, said Adriansyah, adding
that Pertamina targets signing a gas sales purchase agreement for Jambaran
this year.

Pertamina hopes to supply gas from the Jambaran field to industry in
Semarang, in Central Java province, via the Gresik-Semarang pipeline that is
expected to be completed next year.

Indonesia's average daily natural gas output slipped to 1,131,000 barrels of
oil equivalent (boe/d), equal to about 5,932 MMcf/d, in first-half 2017,
down from 1,189,000 boe/d in 2016, government data presented on Aug. 8
showed.

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Link to Original Article:
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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com