Pertamina, Esso to sign deal on LNG projects<\/p>\n
JAKARTA (JP): The state oil company Pertamina and Esso Natuna
\nInc., an affiliate of the U.S. Exxon Corp., are expected to sign
\nan agreement on a US$34 billion natural gas liquefaction project
\nin the Natuna Sea by the end of this year.<\/p>\n
\"We are in the final negotiations with Esso to develop the gas
\nliquefaction project in Natuna, hoping that the deal will be
\nsigned soon after the clarification of some items in the planned
\nagreement later this year,\" Pertamina's president Faisal Abda'oe
\ntold Commission VI of the House of Representatives (DPR) in a
\nhearing here yesterday.<\/p>\n
State Minister of Research and Technology B.J. Habibie, who is
\nalso a supervisor of the Natuna project, assured early this month
\nthat the Pertamina-Esso deal will be signed in November.<\/p>\n
There are still some differences on the 52-item Basic
\nAgreement for the long-term Natuna project emerging between the
\ntwo parties, said Abda'oe, who is also chairman of the project's
\nnegotiating team.<\/p>\n
He did not elaborate on the points of disagreement, but a
\nmember of the commission, Iskandar Mandji, said that exclusive
\nprotection from the government asked by Esso, the tax tariff, as
\nwell as Esso's royalty to Pertamina, remained sticking points.<\/p>\n
Abda'oe explained that the negotiations with Esso consumed a
\ngreat deal of time because the project is very complex and
\ncomplicated.<\/p>\n
Content<\/p>\n
Abda'oe reminded his listeners that the gas output from the
\nNatuna field has a high level of carbon dioxide content,
\namounting to 71 percent. The content may cause a serious
\npollution problem, once it is thrown into the sea.<\/p>\n
\"As an alternative, the carbon dioxide form the Natuna field
\nshould be injected back into the earth, he said.<\/p>\n
Esso has reportedly invested some $16 billion for the initial
\ndevelopment of the gas field in the Natuna bloc, billed to be the
\nlargest concentration of gas reserves in the world.<\/p>\n
Platforms<\/p>\n
The natural gas project will have six treating platforms, six
\ndrilling platforms (each with 36 wells), two living quarters
\nplatforms and four injection platforms.<\/p>\n
The treating platforms are expected to be capable of the bulk
\nextraction of carbon dioxide.<\/p>\n
The Natuna field, operated by Esso under a production sharing
\ncontract with Pertamina since 1980, is located about 1,100
\nkilometers north of Jakarta and 600 kilometers northeast of
\nSingapore at 145 meters depth.<\/p>\n
Both parties have agreed to hold a 50-percent share in the gas
\nliquefaction project, Abda'oe said.<\/p>\n
\"Regardless of the disagreement, we expect that the Natuna
\nproject will start its initial commercial operations by 2004,\"
\nAbda'oe said, adding that the construction of the project will
\ntake eight years.<\/p>\n
He said he expected the construction to start as soon as the
\nagreement is signed.<\/p>\n
Upon project completion, the Natuna field will produce up to
\n14 million tons of liquefied natural gas (LNG) per year, he said.<\/p>\n
In comparison, the LNG plants in Arun, North Sumatra, and in
\nBontang, East Kalimantan, are capable of producing 25 million
\ntons of LNG per year.<\/p>\n
An Esso survey showed that gas deposits in Natuna reach some
\n45 trillion cubic feet.<\/p>\n
\"We expect that the production of the Natural field will
\nanticipate the increasing demand for energy in the country,\" he
\nsaid, cautioning that Indonesia will likely become a net oil
\nimporter in the early 2000s.<\/p>\n
Director general of Oil and Gas Suyitno Patmosukismo said
\nyesterday that Indonesia will become a net oil importer within
\nthe next 10 years, considering that the oil demand in the country
\nis rapidly increasing, while its oil reserves are being depleted.
\n(fhp)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-esso-to-sign-deal-on-lng-projects-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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