ARCO to develop huge gas field in Irian Jaya
ARCO to develop huge gas field in Irian Jaya
JAKARTA (JP): Atlantic Richfield Co (ARCO) of the United
States announced yesterday a massive discovery of about 13
trillion cubic feet (TCF) of proven and probable natural gas
reserves in Irian Jaya.
"This is the largest international discovery in ARCO's
history," Mike Bowlin, ARCO's Chief Executive Officer, said after
a meeting with President Soeharto.
Bowlin said the reserves, which are equivalent to almost 2.2
billion barrels of oil, would be more than sufficient to support
a natural gas liquefaction (LNG) plant with two production
trains.
He said ARCO planned to invest up to US$3 billion to develop
the gas field on the Weriagar and Berau blocks onshore and
offshore Irian Jaya in Indonesia's easternmost province.
President Soeharto yesterday named the gas project Tangguh,
which means strong in Indonesian.
Size
The size of the Tangguh reserves was estimated by the Dallas-
based independent petroleum engineering consulting firm DeGolyer
& MacNaughton (D&M), ARCO said in a statement.
D&M said there may be an additional 6.5 trillion cubic feet
beyond the 13 TCF of proved and probable reserves.
The project will provide Indonesia with a significant resource
base to expand its LNG market share.
State-owned Pertamina oil company, which now operates two LNG
plants at Bontang, East Kalimantan, and Arun in Sumatra's
northernmost province of Aceh, is already the world's largest
exporter of LNG commanding 50 percent of the Asia-Pacific market.
Pertamina now exports about 25 million tons of LNG to Japan,
South Korea and Taiwan each year under long-term contracts.
"This is a milestone in ARC0's global growth agenda and our
continuing relationship with Indonesia, where we have been
Pertamina's partners for three decades," Bowlin said.
"LNG development in Irian Jaya will give ARCO yet another
anchor field development to broaden our income generations
overseas," he said.
Pertamina's president Faisal Abda'oe, who accompanied Bowlin
to the meeting with Soeharto, said the Tangguh gas project would
be included in Indonesia's LNG marketing program.
In addition, Pertamina, Mobil Oil, Exxon and several other
foreign investors are preparing to develop another huge gas field
on Natuna island near Singapore.
Atlantic Richfield Indonesia's president, Leon Codron, said
Irian Jaya was ideally located to service expanding Asian markets
where energy growth was forecast to remain robust.
"ARCO and its partners will drill more wells to certify
additional reserves for a multiple-train LNG project," Codron
added.
ARCO owns 48 percent of the Berau block with Occidental Berau
of Indonesia Inc holding 22.86 percent, and Nippon Oil
Exploration Ltd 17.14 percent.
ARCO also owns 80 percent of the Weriagar block in partnership
with KG Werigar Petroleum Ltd which has 20 percent. (aly/prb/vin)