JAKARTA (rambuenergy.com) – Indonesian state owned oil and gas company PT Pertamina on Tuesday (June 30) signed a major sales and purchase agreement (SPA) with Italy’s giant oil and gas company Eni, the operator of Muara Bakau deepwater block, located in Kutei Basin, East Kalimantan.
Under the deal, Pertamina will purchase 1.4 million tons per annum of LNG from from Jangkrik and Jangkrik North East fields development project in Muara Bakau PSC for a period of seven years, starting from 2017.
Pertamina said it will buy LNG from Muara Bakau from output that will be set aside for domestic market under domestic market obligation (DMO) requirement as well as from non-DMO portion. The LNG purchase deal is aiming at meeting the growing demand for LNG from domestic market especially demand from industries in west Java and north Sumatera.
The signing agreement was witnessed by the Indonesian Minister for Energy and Mineral Resources Sudirman Said.
“The signing of these agreements represents a key milestone for the Jangkrik Field Development Project. It is one of the first deep-water gas projects in Indonesia being developed under a fast track scheme, and confirms Eni’s commitment in supplying gas for the development of the Indonesian domestic market,” Eni’s CEO, Claudio Descalzi, said in a statement.
“I’m very pleased with the strong and fruitful relationship with the Indonesian Authorities, Pertamina and our Joint Ventures Partners in Jangkrik”, Eni’s CEO, Claudio Descalzi, said.
The Jangkrik Fields Development Project which consists of Jangkrik and Jangkrik North-East fields requires the drilling of production wells to be linked to a Floating Production Unit for gas and condensate treatment, and subsea pipeline laying for transportation to the Bontang Terminal. Production start-up is expected in 2017.
The Jangkrik fields, discovered in the Muara Bakau block in 2009 and 2011, are located at a depth of 400 meters in the Makassar Strait, approximately 100 km east of Balikpapan.
Eni is the operator of the block with 55 percent of working interest, whereas the other JV partners are GDF Suez Exploration Indonesia, a subsidiary of ENGIE, formerly GDF SUEZ, with 33.334 percent stake and Saka Energi Muara Bakau with 11.666 percent stake.
Earlier, ENI together with SKK Migas awarded EPCI (engineering, procurement, construction and installation) contracts to three consortia worth US$4.136 billion for the project.
The EPCI I contract was awarded to a consortium whose members consist of PT Saipem Indonesia, PT Tripatra Engineers and Constructs, PT Chiyoda International Indonesia and Hyundai Heavy Industries Co. Ltd. The EPCI I covers fabrication and installation of Floating Production Unit (FPU) barge.
The EPCI II was awarded to PT Technip Indonesia-Technip Geoproduction (M) Sdn. Bhd consortium. This EPCI covers the construction of onshore receiving terminal, gas pipe network and other supporting facilities.
The EP (engineering and procurement) III was awarded to PT FMC Santana Petroleum Equipment Indonesia. This covers the subsea system, umbilicals and supporting facilities.
Muara Bakau fields are expected to produce 450 million standard cubic feet of gas per day (MMSCFD) and 1,500 condensate per day.
The two fields are about 70 kilometers to the north east of Delta Mahakam with a water depth 450-500 meters. Jangkrik field is expected to produce 300 MMSCFD, while Jangkrik North East is expected to produce 150 MMSCFD of gas. (*)
Edited by Roffie Kurniawan (email@example.com)