Natuna boosted by Japan talks, but doubts remain<\/p>\n
SINGAPORE (Reuter): Japanese involvement in Indonesia's Natuna
\ngas field would be a major boost for the beleaguered US$40
\nbillion project, industry sources and analysts said yesterday.<\/p>\n
But it was unlikely to signal that liquefied natural gas (LNG)
\nwould be Natuna's first marketing option, they said.<\/p>\n
On Wednesday, a consortium of Japanese companies said it
\nexpected to agree with Indonesia by the end of the year on taking
\na 13-percent stake in the gas project.<\/p>\n
Japan is the world's biggest importer of LNG and Natuna is one
\nof the world's biggest gas fields. The two would seem to fit
\ntogether and often Japanese companies buy a stake in a gas field
\nas a precursor to buying its gas.<\/p>\n
But industry sources said an LNG project would not support
\nNatuna its early years of production in the middle of the next
\ndecade.<\/p>\n
Potential buyers were looking at other rival projects in
\nIndonesia, the Middle East and on Australia's North West Shelf,
\nbecause they would be able to produce cheaper LNG.<\/p>\n
So Natuna has had to seek other gas markets and was looking at
\nbuilding a 1,400 kilometer (875 mile) natural gas pipeline to
\nJakarta to serve power stations in Java.<\/p>\n
That means the Japanese would have to take a long-term view on
\nthe project and hope that the returns on selling gas by pipeline
\nto the domestic market would produce returns to bring down the
\ndevelopment cost of an LNG plant later.<\/p>\n
"The Japanese might take a stake in Natuna, but not for the
\npotential LNG. They might take a stake and hope that down the
\nroad, perhaps in 15 years from now, they might get some LNG," an
\nindustry analysts said. He declined to be identified.<\/p>\n
"It's an awfully big field. It has recoverable reserves of 46
\ntrillion cubic feet. That could meet Japanese needs through the
\nmiddle of the next century. Japanese are always long term
\nthinkers," he said.<\/p>\n
The Natuna field is a giant deep-water project being developed
\nby a consortium of Exxon Corp. with 50 percent, Mobil Corp. with
\n26 percent and Indonesia's state-owned oil company Pertamina with
\n24 percent.<\/p>\n
The Japanese consortium, including eight trading houses and
\nthree exploration companies, is negotiating for a 13 percent
\nstake.<\/p>\n
Pertamina said last December it expected an agreement with the
\nJapanese by early in 1997. But the talks slipped to the back
\nburner, prompting market concern that the Japanese had pulled
\nout.<\/p>\n
On Wednesday, members of the consortium said they expected
\nagreement by the end of this year, based on terms achieved by
\nMobil when it farmed into the project in 1996.<\/p>\n
Mobil paid nothing for its stake but agreed to pay its
\nproportion of development costs.<\/p>\n
Analysts said an investment under similar terms would be very
\nattractive to Japanese companies, especially as many of them
\nwould hope to gain contracts in engineering to help develop the
\nproject.<\/p>\n
"It would also give them an inside track on the project, plus
\nsecurity of supply over the long term," one analyst said.
\n"And if you are going to pay nothing for it, why not."<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/natuna-boosted-by-japan-talks-but-doubts-remain-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}