Gas pipeline from Natuna field to Java considered
JAKARTA (JP): The state-owned gas and oil company Pertamina and partners are considering to transport natural gas from Natuna Island's gas fields through a pipeline to Java for electricity and industry.
President of the state-owned oil and gas company Faisal Abda'oe said yesterday several parties including Pertamina, the state-owned electricity company PLN, the state-owned gas company Perum Gas Negara, the Agency for the Assessment and Application of Technology (BPPT) and Exxon Corp. of the United States, were currently making a feasibility study on a pipeline to deliver natural gas from the island to Java.
The study would also analyze the capacity of Java's industrial and electricity sectors to absorb the gas.
"The feasibility study has to be completed by December. But I think it will be completed by the end of this month," Faisal said in a hearing with the House of Representatives' Commission VI for industry, trade, mines and energy, manpower and investment.
Feisal said the option of delivering gas from Natuna was being considered not because the gas field's developers were currently faced with difficulty in exporting gas, but to promote the use of gas for electricity, industry and transportation in Java.
Natuna is the biggest gas field development in Asia with 222 trillion cubic feet of general reserves, which are expected to whittle down to 46 trillion in proven reserves because of a 22- percent carbon dioxide content.
The US$40 billion gas field is 50 percent owned by Exxon, 26 percent by Mobil Corp. of the United States, and 24 percent by Pertamina.
Pertamina wants to reduce its stake and has offered Thailand an 11 percent stake in the gas field in return for its willingness to buy gas from the island.
But Thailand recently announced that it delayed purchasing gas from the island to cope with its current economic turmoil, leaving the gas field's developers a hard task in searching for other potential buyers.
The Natuna gas field is scheduled to come on stream in 2004.
Faisal denied that the gas field's developers had forced PLN to buy Natuna's gas.
Director General of Electricity and Energy Development at the Ministry of Mines and Energy Endro Utomo Notodisuryo said at the hearing that several issues, including those regarding the price of the gas and the distribution to non-PLN customers, thus far remained unsettled in the deals between PLN and the developers of the Natuna gas field.
He said PLN would not be able to consume all the gas, and could only afford the gas at a price of $2.45 per barrel compared with the offered price of $3.40 per barrel.
Endro, however, praised the planned gas delivery from Natuna as a chance to develop a gas grid across the country.
PLN president Djiteng Marsudi said during the hearing that PLN would only allow a maximum of 10 percent of the total capacity of power plants in Java to be supplied with gas from Natuna to avoid trouble in the future.
If the power plants in Java generated a total of 40,000 megawatts (MW), the gas from Natuna could be used to generate a maximum of 4,000 MW, he explained.
"The policy to limit the use of Natuna's gas for power generation is aimed at preventing dependency on one single source of energy," Djiteng said.
"Suppose power plants in Java used a lot of gas from Natuna and then there was failure in the undersea cables to distribute the gas from Natuna to Java. Java would instantly experience a blackout," he added. (jsk)