Pertamina set to spend $50m for CBM development

The Jakarta Post | April 20, 2012 | Rangga D. Fadillah
State-run oil and gas firm PT Pertamina, through its subsidiary PT Pertamina Hulu Energi (PHE), has set aside US$50 million for the development of coal-bed methane (CBM) from 2009 until 2015.

Budi Tamtomo, PHE’s vice president for Java assets and CBM, said the funds would be used in the first three years, mainly for drilling 50 exploration wells and conducting geological and geophysical studies.

“The money will be used for exploration activities in the first three years, but if we calculate the next phase until the fifth year, the amount of investment will exceed $50 million,” he told reporters on the sidelines of the Indo CBM 2012 in Jakarta on Thursday.

With that program, Pertamina hopes to produce around 100 million standard cubic feet per day (MMSCFD) of CBM in 2015, 500 MMSCFD in 2020 and more than 500 in 2025. Pertamina’s decision to develop CBM aims to anticipate growing gas demands from domestic users.

Currently, PHE holds participating interests as an operator or a shareholder of 14 CBM blocks, with three of them being awarded on Wednesday. The $50 million is allocated to support activities in the 14 blocks.

The company’s first 11 blocks are Tanjung Enim, Muara Enim, Muara Enim I, Muara Enim II, Muara Enim III, Suban I and Suban II in Sumatera. In Kalimantan, the blocks are Sangatta I, Sangatta II, Tanjung II and Tanjung IV.

Out of those blocks, only four have begun production. According to PHE’s 2012 work and budget plan, the blocks are Sangatta I (1.2 MMSCFD), Sangatta II (0.48), Muara Enim (0.54) and Tanjung Enim (0.25).

Budi said the company had seen potential market targets for CBM in the future. For blocks in Sumatera, CBM could be sold to PT Pupuk Sriwijaya (Pusri), state power company PT PLN’s power plants and city gas services.

In Sangatta, the gas could be utilized by the Bontang liquefied natural gas (LNG) plant, PT Pupuk Kalimantan Timur, power plants and city gas, while the gas from Tanjung might be delivered for a new LNG or compressed natural gas (CNG) plant that might be set up in South Kalimantan.

As previously reported, PHE and PLN have agreed to jointly develop CBM for electricity in Sangatta and Muara Enim. The power company expects production of Sangatta could reach 0.1 MMSCFD, and 0.5 MMSCFD in Muara Enim.0

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