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RI to begin to auction shale gas fields this year
The government expects to start opening tenders for shale gas field development in eastern Indonesia this year, an official told reporters Thursday
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he government expects to start opening tenders for shale gas field development in eastern Indonesia this year, an official told reporters Thursday.
Shale gas is natural gas produced from shale and seen as an unconventional form of gas reserves
which has become an increasingly important gas source in several countries.
Edy Hermantoro, an upstream oil and gas director at the energy and mineral resources ministry, said Indonesia was upbeat on its untapped shale gas potential.
“A study from Bandung Technology University [ITB] states that Indonesia holds 1,000 trillion cubic feet [TCF] of shale gas reserves. We will open tenders for development of onshore shale gas fields located in eastern Indonesia this year,” Edy said.
He refused to give details on the fields numbers and location, saying that the government was preparing the regulation on this matter.
“We are preparing development mechanisms for shale gas fields. Currently, we have held joint studies with a company,” Edy said.
Earlier, Edy said that shale gas development would be economical if the gas reserves were located between 300 and 400 meters below ground. The exploration would take about one year with a drilling cost of up to US$10 million per well or more or less similar to drilling for conventional gas reserves.
Shale gas development may be expected to partly compensate for the growing gas deficit in the long term, but the severe gas supply deficit has begun affecting industry.
State gas distributor PT Perusahaan Gas Negara (PGN) announced last month that industries in West Java, East Java, and North Sumatra were suffering an acute shortage of gas as the company could not supply the increasing demand.
PGN estimated that the gas shortage has reached about 297 million standard cubic feet per day (MMSCFD) and this could result in layoffs of more than 300,000 workers due to declining production.
Energy and Mineral Resources Minister Darwin Zahedy Saleh said Wednesday that the government might allow gas imports to deal with the deficit.
“If we can get good prices, then the importation of gas would also be an option,” Darwin said.
