Gas flows again from ExxonMobil's Arun fields

Gas flows again from ExxonMobil's Arun fields

JAKARTA (JP): Gas started flowing again from ExxonMobil Oil
Indonesia Inc.'s Arun fields in Aceh on Wednesday afternoon,
months after the Indonesian unit of the American energy giant
Mobil Corp. suspended its operation.

"The operation was restarted at 4.30 p.m. (Wednesday),
starting from the Cluster II," Sidick A. Nitikusuma, head of
general affairs at state oil and gas company Pertamina's
directorate of production sharing management, told The Jakarta
Post.

He said ExxonMobil would initially pump up to 60 million
metric cubic feet per day (MMCFD) of gas from Cluster II, adding
that the firm would gradually raise the cluster's gas production
to 250 MMCFD over four and five days.

ExxonMobil operates dozens of gas fields in the area, which
are divided into four clusters.

After Cluster II is operating fully, ExxonMobil will proceed
with the operation of Cluster I at a production rate of 200
MMCFD, Sidick said.

But he was reluctant to provide a timetable for the operation
of Cluster III and IV, saying the company would initially focus
on the first two clusters.

Sidick said that the firm had finally resumed its gas
operations after completing technical preparatory work as well as
receiving protection from the authorities.

He said that approximately three battalions from the
Indonesian National Military (TNI) and the National Police were
available to guard the Arun gas fields from Aceh separatist
rebels.

ExxonMobil shut down its Arun gas fields in mid-March on
security fears arising from the activities of local rebels. But
the government had since pressured the company to resume its
operations.

Prior to the suspension, ExxonMobil was producing an average
of 1.6 BCF of gas and 30,000 barrels of condensate per day.

Sidick said that the two cluster's resumption of operations
would enable nearby liquefied natural gas (LNG) producer PT Arun
NGL to recommence its LNG production in mid-August.

"We already started to supply the Arun LNG plant today
(Wednesday), but it has to wait for its terminal to be fully
filled up before starting production," he said.

"Then, Arun NGL can restart exporting LNG shipments in mid-
August," Sidick added.

ExxonMobil supplies 90 percent of its natural gas production
to Arun NGL, while the remaining 10 percent is supplied to
fertilizer firms PT Pupuk Iskandar Muda and PT ASEAN Aceh
Fertilizer (AAF), as well as pulp firm PT Kertas Kraft Aceh.

After ExxonMobil halted its gas production, Arun NGL also
stopped its LNG production.

The plant's shutdown has forced Pertamina to transfer the
plant's LNG orders, mostly from Japanese and South Korean buyers,
to the Bontang LNG plant.

Arun NGL has suffered a Rp 4 trillion (US$350.8 million)-loss
as a result of the halted production.

It has missed the export of 40 LNG shipments during the four-
month period since ExxonMobil's gas supply was halted.

Arun NGL is initially targeting to export 116 LNG shipments,
or about 23.5 million metric tons of LNG, this year, but it said
it would be hard pressed to meet the year's target due to the
halting of ExxonMobil's gas supplies.

AAF also said it incurred losses of about Rp 264 billion
between March and June following the halting of ExxonMobil's gas
supplies.

AAF produced 587,055 tons of fertilizer last year, of which 99
percent, or 567,027 tons, was exported. (05)