Gas supply contract signed for Tangguh LNG project

JAKARTA (JP): State-owned oil and gas company Pertamina's two production-sharing contractors -- Atlantic Richfield Co (ARCO) Indonesia and British Gas (BG) -- will jointly supply natural gas to the Tangguh liquefied natural gas (LNG) project in Irian Jaya.

Pertamina spokesman Ramli Djafaar said yesterday that natural gas would be taken from ARCO and BG gas fields in the Wiriagar, Berau and Muturi blocks in Irian Jaya.

"ARCO will be responsible for the operation of gas fields in the three production-sharing contract areas," Djafaar said.

ARCO recently announced a huge discovery of about 13 trillion cubic feet (TCF) of proven and probable natural gas reserves in its production-sharing contract areas of Wiriagar and Berau.

The company said the reserves, which were equivalent to almost 2.2 billion barrels of oil, would be more than sufficient for a LNG plant with two production trains.

The company said a Dallas-based independent petroleum engineering consulting firm, DeGolyer and MacNaughton, estimated there might be an additional 6.5 TCF beyond the proved and probable reserves.

ARCO, through its affiliate Atlantic Richfield Berau Inc, has a 48 percent stake in the Berau block in a partnership with Occidental Berau of Indonesia Inc, which has a 22.856 percent share, Nippon Oil Exploration (Berau Ltd) 17.144 percent, and KG Berau Petroleum Ltd 12 percent.

Another ARCO affiliate, Atlantic Richfield Wiriagar Inc, has a 80 percent stake in the Wiriagar block, in a partnership with KG Wiriagar Petroleum, which has the remaining 20 percent of shares.

According to Djafaar, the Muturi block, which is located next to both of ARCO's Berau and Wiriagar contract areas, is 50 percent owned by BG Exploration and Production, 45 percent by Cairns Ltd, and 5 percent by Saptapetra Wisesa.

The Tangguh LNG plant, which will be developed by Pertamina in Irian Jaya, will further increase Indonesia's LNG production.

Pertamina, which at present operates two LNG plants in Bontang, East Kalimantan and Arun in Sumatra's northernmost province of Aceh, exports about 25 million tons of LNG to Japan, South Korea and Taiwan each year under long-term contracts.

Pertamina, Mobil Oil, Exxon and several other foreign investors are also preparing to develop another LNG plant on Natuna Island. (jsk)