The Jakarta Post | May 05, 2012 | Rangga D. Fadillah
The government announced on Wednesday that the long-delayed development of the Kepodang gas field at the Muriah block off Central Java will soon be resume following the approval of its plan of development (PoD).
Energy and Mineral Resources Minister Jero Wacik said he had met Malaysia-based Petroliam Nasional (Petronas) chief executive officer Shamsul Azhar Abbas to discuss the company’s plan to accelerate the development of the field.
“Petronas has just presented to me how it will develop the two fields: Kepodang and Bukit Tua [at the Ketapang block in East Java]. The company said it could move forward first production from 2015 to 2014,” he told reporters after the meeting at his office in Jakarta.
He continued that the Kepodang field was previously scheduled to deliver 116 million standard cubic feet per day (mmscfd) of gas to state electricity company PT PLN’s power plants in Tambak Lorok, Semarang, Central Java, in April 2015. But after further discussions, the company said it was ready to begin production in October 2014.
For the pipeline from Kepodang to Tambak Lorok, Jero reported that Bakrie & Brothers, the winner of the construction tender, had sent a letter to the ministry confirming its readiness to install the pipeline in the near future and complete the project before the first gas delivery.
“Previously, both Petronas and Bakrie were reluctant to begin their work because they were waiting on each other. Now, everything has been matched, both can start working,” Jero reported.
The production-sharing contract (PSC) with Petronas will actually expire in 2021, but since the project has been delayed for more than three years, the government has compensated by prolonging the PSC until 2025, assuming the worst case scenario that gas delivery starts in 2015.
The head of upstream oil and gas authority BPMigas, Raden Priyono, said his agency would help Petronas to accelerate the development of the Kepodang field.
“We’ll accelerate approval of necessary permits for the project. We’ll find ways to execute all contracts faster than the schedule,” he explained.
He revealed that the gas price had been set at US$4.61 per million British thermal unit (Btu), with an escalation of between 6 and 8 percent. PLN would pay that price plus the toll fee for using Bakrie’s pipeline, he added.
“The toll fee will be decided later,” Priyono said.
The initial plan saw that Petronas would build the pipeline under the upstream scheme, but in 2009, the concession holder for the Kalimantan-Java (Kalija) pipeline, Bakrie & Brothers, proposed to include the Kepodang-Tambak Lorok pipeline in the Kalija project under the downstream scheme.
The Energy and Mineral Resources Ministry approved Bakrie & Brothers’ proposal in 2010, saying it would bring more revenues, as the government would not pay back the construction cost as stipulated in the “cost recovery” regulation.
PLN oil-based fuels and gas division head Suryadi Mardjoeki hoped the completion of the Kepdang field’s development would not fall behind schedule because that would cause great loss to the power company.
http://www.thejakartapost.com/news/2012/05/10/kepodang-field-deliver-gas-ahead-schedule.html
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