Govt prioritizes ARCO's LNG project in Irian Jaya
Govt prioritizes ARCO's LNG project in Irian Jaya
JAKARTA (JP): Minister of Mines and Energy Kuntoro
Mangkusubroto said the government was prioritizing the
development of the Tangguh liquefied natural gas (LNG) project in
Irian Jaya over other LNG projects across the country.
Kuntoro said the government had instructed state oil and gas
company Pertamina to prioritize marketing the gas to be produced
by American energy company Atlantic Richfield Company (ARCO) and
British Gas at the Tangguh LNG plant.
"The Tangguh LNG project has top priority. Other projects,
including the development of Train I (ninth) at the Badak LNG
plant in East Kalimantan and the East Natuna LNG project, should
be shelved for the moment," Kuntoro told The Jakarta Post on
Friday.
The Tangguh LNG plant will be fed with natural gas from three
production-sharing blocks -- the Muturi block operated by British
Gas and the Wiriagar and Muturi blocks operated by ARCO.
The three blocks reportedly have combined proven and probable
gas reserves of 18.3 trillion cubic feet (tcf) with additional
potential gas reserves of 3.9 tcf.
ARCO claims the blocks contain very clean gas.
The Tangguh LNG plant project, if realized, will become the
country's third LNG center after the Badak LNG plant in Bontang
and the Arun LNG plant in Aceh.
The East Natuna LNG project, also known as the D-Alpha LNG
project, is 50 percent owned by American energy company Mobil
Corp., 26 percent by Esso, also from America, with the remaining
24 percent held by Pertamina.
Mobil and Esso recently merged into Exxon Mobil Corp.
The East Natuna LNG project will be fed with natural gas from
the D-Alpha block located east of the Natuna islands in the
Southeast China Sea, where Mobil and Esso have reportedly found
42 tcf of natural gas.
However, the D-Alpha block contains gas with a high carbon
dioxide (CO2) content which must be separated before the gas can
be sold, a process which will drive the price of the gas beyond
the price of gas from other fields.
President B.J. Habibie decided last year to delay the project
due to the regional economic turmoil.
But the head of the government-commissioned Natuna Gas
Development Project Team, Faisal Abda'oe, announced early this
year that his team had resumed marketing gas from the D-Alpha LNG
plant, following the discovery by Mobil of a technology to reduce
the cost of extracting gas from the D-Alpha block.
Informed sources said PT Badak NGL Co, which is owned by
French company Total Indonesie, American companies Vico and
Unocal and Pertamina, had also planned to develop its ninth LNG
train, or Train I.
The company has lobbied Pertamina to market the gas from the
planned ninth train.(jsk)