TotalFinaElf to invest $900m

TotalFinaElf to invest $900m

Dow Jones, Singapore

TotalFinaElf is allocating US$900 million in its 2002 budget for gas development offshore East Kalimantan, the largest annual budget the French company has ever allocated to its Indonesian operations.

Ananda Idris, corporate communications manager at TotalFinaElf E&P Indonesie, said the $900-million budget also reflects one of the largest amounts ever allocated to a TotalFinaElf affiliate.

The budget will be spent on constructing new production and processing facilities at Peciko and Tunu gas fields off the East Kalimantan coast, Idris said.

Peciko and Tunu fields produce on average 2.2 billion cubic feet of natural gas a day, he said. The gas from these fields is processed at PT Badak NGL, a joint-venture natural gas liquefaction plant in Bontang, East Kalimantan.

PT Badak NGL, the operator of state-owned Pertamina's LNG plant in Bontang, is a joint venture between Pertamina, which has a 55 percent stake, Vico at 20 percent, Japan-Indonesia LNG Company, or Jilco, at 15 percent and TotalFinaElf E&P Indonesie at 10 percent.

The gas from TotalFinaElf's fields makes up around 60 percent of the feedstock processed at Bontang LNG plant, and that percentage is expected to rise next year, another company official said. "The percentage is a function of certified reserves, assessed by an external party," and is subject to change, he stressed.

Idris said TotalFinaElf had contributed 70 percent of recent LNG sales committed from Bontang.

Tunu and Peciko fields produce 95 percent of an average 2.3 billion cubic feet of gas daily from TotalFinaElf five producing fields. TotalFinaElf's cumulative gas production off East Kalimantan from January to August stood at 567 billion cubic feet of gas.

PT Badak's production capacity stands at 22 million tons of LNG a year, and plans are underway to expand this by 3 million tons.

Pertamina is ready to invite pre-qualified parties to participate in an engineering, procurement and construction, or EPC, tender to build a ninth processing train, the TotalFinaElf official said. It would take 36 months from the issue of the EPC tender to the completion of the expansion at Bontang, he added.