State gas distributor PT PGN said Friday that the gas supply from the Maleo field in East Java, operated by Australia-based Santos, will temporarily be stopped in December for maintenance activities
tate gas distributor PT PGN said Friday that the gas supply from the Maleo field in East Java, operated by Australia-based Santos, will temporarily be stopped in December for maintenance activities.
The company’s spokeswoman Nella Andaryati reported that the shutdown at the Maleo field would be conducted in two phases: the first phase would take place between Dec. 3 and 5, while the second phase would be between Dec. 9 and 19.
“That schedule is the last confirmation we received from Santos. The schedule has been already been changed several times,” she said.
Previously, Santos planned to stop its 110 million standard cubic feet per day (mmscfd) gas supply in April or June this year, but then it revised the schedule to October. Before postponing again until December, Santos said the stoppage would take place in November.
“We don’t know whether the December schedule is the final one or will be changed again. According to the latest schedule, the gas supply will resume to its normal levels after Dec. 19. We have informed our industrial customers about this situation,” Nella revealed.
She continued that due to the shutdown, PGN may lose income from gas sales to industries but there would be no compensation from Santos. She added that this was the first time Santos had halted its supply to PGN.
“Santos usually just reduces the supply during maintenance. As of today, there are no alternative gas supplies for industries,” Nella explained.
Santos plans to conduct maintenance activities to repair its offshore rig in the Maleo field at the Madura offshore block in East Java. The company claimed that the repair work was necessary to realize its commitment to run safe operations.
The Australian company holds a 67.5 percent share at the Madura offshore block, while the remaining 32.5 percent is owned by PC Madura Limited and PT Pantai Madura, which own 22.5 percent and 10 percent, respectively.
The secretary-general of the Forum for Natural Gas-Using Industries (FIPGB) and head of the Ceramic Association, Achmad Widjaya, told The Jakarta Post that he demanded PGN provide compensation to industries, such as changing the gas to compressed natural gas (CNG) and liquefied natural gas (LPG).
“We still hope Santos doesn’t fully stop the gas supply,” he said.
East Java was home to 12 ceramic companies that employed around 3,000 workers, Achmad continued. The stoppage, he calculated, would incur a loss of Rp 2.43 billion per day. Based on the FIPGB’s data, 326 factories from 22 industrial sectors still face gas shortages. The industries, located in 16 provinces, include food and beverages, textiles, fertilizers and ceramic tiles.
Upstream oil and gas regulator, BP Migas Japalu, which oversees East Java, Papua and Maluku, said earlier that it would seek a mechanism for Santos to stop producing gas in stages until the second week of December, rather than all at once. The gas producer might conduct the repairs on rotation, with one day for repairs followed by two days of resumed gas production, and so on. In this way, it could still supply gas to industries, the agency suggested.
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