Government Expects Gas Kepodang and Bukit Tua Gas Fields To Start Production in October 2014

Jakarta, Investor Daily, May 10,  2012 – The government has signed a revision of plan of development (POD) of Kepodang Field (Muria Block)  and Bukit Tua Field (Ketapang Block) which are managed by Petronas Carigali.

Under the revision or new POD, Petronas should start its exploration of two fields in October 2014 at the latest. Contracts of the Malaysian company are also extended.

Minister of Energy and Mineral Resources (ESDM) Jero Wacik said that the revision has been made because the oil and gas projects are  late to start as a result of the government’s changed scheme  of pipe construction development. 

Earlier, Petronas reportedly called on the government to give the company chance to start  the operation of the two fields in April 2015.

“However, after the negotiation, Peronas finally agreed to make the operation of the two gas fields in October 2014 at the latest. If the fields works run smoothly, the operation of the two fields can start in June 2014,” said Jero Wacik after attending a meeting with Petronas Carigali President Director Datuk Shamsul Azhar Abas in Jakarta, Wednesday, May 09.

Wacik said that Kepodang Field will produce 116 MMSCFD  per day. The gas supply will be there from the field to steam gas power plant (PLTGU) Tambak Lorok through a gas pipeline.

The gas pipe will be built by PT Bakrie and Brothers. Bakrie also agreed that the gas pipe establishment will be finished at the same time with the start of gas supply from Kepodang Field.

“Bakrie has sent a letter confirming the company to start the project soon. They have made a road map with  a target  a pipe project completion in 2014 or at the same time with the Pertonas’ gas production. So that when the gas supply starts, then at the same time there will be gas pipe project completion,” he said.

Meanwhile, Bukit Tua Field in East Java is expected to produce 50 MMSCFD and 20,000 barrels per day (bph).

Gas from the gas fields will be supplied to PT Petrogas Jatim  Utama at US$ 5.5 per MMBTU with  3 percent price escalation per year.

At present Petronas is still in a tender for 13 packages of engineering, procurement and construction (EPC). Two big EPC packages are for production facilities which are  already in a commercial stage. 

Meanwhile, transportation and  a pipe installation is already in a technical stage.

Evita Legowo, the director general of oil and natural gas of the ESDM ministry, said that the next step after the revision of POD is finalizing a gas supply agreement (GSA) and gas trade agreement (GTA) which will be finished soon this month.

On the acceleration the development of the two fields, Petronas president director will directly monitor the project,  among other by visiting Jakarta one every three months.

Contract Period

In the new POD, the government gives a contract period extension due to the change of government’s scheme on upstream and downstream sector for three years. The change is not the fault of Petronas but entirely it is related to the government’s decision.

Rudi Rubiandini, deputy of operation and control of the Upstream Oil and Gas Operating Agency (BP Migas) said that the change of POD is given to Personas which is suffering from the three year late  of the project. 

With the revision, gas volumes  remain the same and there are no price hikes.

There is change of a contract period of Kepodang Field from 2021 to 2025. But so far, there is no information on the contract period of Bukit Tua Field.

(AYU)