PTT may buy gas from Natuna D Alpha

Alfian ,  The Jakarta Post ,  Jakarta   |  Fri, 04/24/2009 1:06 PM  |  Business

Thailand's biggest energy company, PTT Plc., is in talks with Indonesia to buy gas from the Natuna D Alpha block.

The company may need the gas to supply its petrochemical business in Rayong, Thailand, Energy and Mineral Resources Purnomo Yusgiantoro said Thursday.

"We are currently still negotiating the gas price and the possibility of transporting it to Rayong," Purnomo said at a business talk held by the Indonesian Association of Petroleum Engineers (IATMI).

He said PTT had once been in talks with Indonesia to buy gas from other blocks, but at that time the company decided to get its gas supply from Myanmar.

"The gas supply now seems to be declining, so the company is looking for gas from other sources."

He did not give details on how much gas PTT might buy, saying this was still being negotiated.

Although state oil and gas company PT Pertamina has not decided who will be its partner in developing the Natuna D Alpha block, Purnomo said the government and Pertamina would continue to offer the opportunity to various potential buyers.

"We are always looking for the market, because we don't want to be too late," said Purnomo, adding buyers must be found before the block enters the production stage.

Pertamina has said commercial production of natural gas from the Natuna field may begin in 2017.

During Thursday's meeting, Purnomo also said gas from the block might be transported through a floating LNG terminal and gas pipelines.

"Early findings from a feasibility study shows that using pipelines will be economically feasible because they can also transport high-level CO2 in the gas from the Natuna block," he said.

Located off Riau Islands, the Natuna D Alpha block is estimated to contain 46 trillion cubic feet (tcf) of gas, making it among the biggest reserves in Asia.

It held more than a third of Indonesia's reserves of 106 tcf as of the end of 2007.

Initially, Pertamina and US-based ExxonMobil had rights over the block, with 76 percent participating interest for ExxonMobil and 24 percent for Pertamina.

But in 2005, the government decided not to extend ExxonMobil's contract, saying the company had failed to submit the results of a feasibility study.

In June last year, the government appointed Pertamina to develop the block, with the company now holding 40 percent of the participating interest.

Pertamina has shortlisted eight potential partners: ExxonMobil, Royal Dutch Shell Plc., Chevron Corp., Eni SpA, Total SA, StatoilHydro ASA, China National Petroleum Corp. and Malaysia's Petroliam Nasional Bhd. (Petronas).

It remains unclear when Pertamina will decide on the matter.

After meeting with Indonesian President Susilo Bambang Yudhoyono, Malaysian Prime Minister Najib Razak said Thursday that Petronas may bid for a stake in the Natuna block.

"I thank the President for the offer to Petronas to participate in the Natuna gas area development," Najib said.

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